How to Manage Growth in the Tightening Labor Market

The headlines above are just from recent posts regarding the tightening US labor market. There is no doubt things are changing amidst a supercharged economy and will get even tighter as companies gain long term confidence in the economy, tax rates and lessened regulation. This is great news for business, but also presents challenges as we shift to a “buyers” market with regards to labor which will eventually raise wages and make it harder to attract and retain employees. If you ignore this new labor market, you may find yourself with less than desirable workers at a time that your business is growing fast.

To give you an idea of how strong this job market is, people are coming off disability and government assistance to get back to work, and employers are even hiring and training ex-cons and people with less than amiable history. Skilled labor, manufacturing are the hardest hit but even entry level labor is becoming harder and harder to find as well. Increasingly, those that are available for work, are not of the highest quality of workers.

So far, wages have not kept pace with the tightening labor market. This is likely due to a lack of absolute confidence by employers who are still stinging from the last recession and holding onto a “wait and see” attitude. But that may be short-lived. As growth increases, and businesses must meet increased production and service deadlines, desperation will set in. This will likely happen with large businesses first, because they have a deeper pocket and are sitting on profits they can spend, leaving small business to fend for whats left and forced to get creative to attract and retain the best employees.

Small businesses have several options to improve their chances of finding top talent, here are 4 steps you can take:

Pay Market Wages
Gone are the days of doing more with less as many businesses had to do during the recession. Other than government forced minimum wage increases, wages have been flat. The time now has come to begin to increase wages along with the job market value. The level of increase does not need to be drastic but understand that if you want quality workers that will stay with you, you will have to sweeten the pot a bit, this goes for existing employees and new hires. Consider performance based pay bonuses where employees are rewarded for their efforts as your business grows.

More Than Just Money
Everybody seems to need more money, but this isn’t the only reason they will work for ans stay with an employer. Workers today have busy lives, they appreciate flexibility, closeness of your business to their homes and simple inexpensive benefits like 401k, health insurance and supplemental benefits.

You can also create a much more enjoyable work environment that fosters teamwork and longevity by providing coffee, snacks and a more relaxed environment where employees feel more at home.

Create a Transparent Work Environment
If your business has increased volume and workload, its likely that workers will perceive that there is more profit as a result. Most employees don’t understand that growth equals more expenses so being transparent as far as where the business is, where it’s going and how they fit into the plans. Employees want to feel a part of something more than just helping the owner(s) afford new Mercedes.

Help them to grow by giving them opportunities to do more, make more and grow with your business, you will will gain a loyal following.

Get Help Recruiting
Most businesses don’t have a wide enough net to find the best workers, nor the bandwidth to sort through the numerous unqualified resumes to g=find that gem in the rough. Recruiting agencies reach a broader swath of employees and have automated filters to help them fin the right employee. Outsourcing the task of hiring can save you time and money, as well as reduce the likelihood of making a bad hiring decision, which you can ill afford at this time.

Infinium can help you in many ways finding ways to make hiring easier and create a more successful workplace. Contact our HR pros today at info@infiniumhr.com and we can provide some ideas and some resources to assist you, including recruiting and staffing assistance.