Small businesses get creative to hire hard-to-find labor

As some corporations slow the pace of hiring due to economic concerns, small business owners are falling behind when it comes to staffing up.

Almost two-thirds of small businesses were hiring or trying to hire in September, according to a report from the National Federation of Independent Business (NFIB), but 46% reported they couldn’t fill those job openings, well above the 48-year historical average of 23%.

The difficulty in hiring has prompted some small business owners to seek more creative solutions to land labor, so they can grow their businesses or — in the worst case — just stay afloat.

“Small businesses are not expanding at the rate that they were in 2019,” Homebase Founder and CEO John Waldmann told Yahoo Finance Live. “It’s actually gotten so bad that we’ve seen small businesses closed out because they can’t hire…This is a real challenge to small businesses and if we’re going to solve this, it’s going to take a lot of different things — including making these jobs more attractive.”

(Photo: Getty)

Attracting, hiring, and retaining quality employees is often a challenge for companies of every size. It’s no easier in current times of low unemployment, high competition, and a red-hot labor market, making out-of-the-box ideas even more critical.

For Diana Manalang, owner of Little Chef Little Cafe in Queens, N.Y., that means hiring high schoolers to help weather the staffing shortages.

“It is working, they show up, they come to work for the most part,” Manalang said. “We feed them two to three meals a day. We buy them groceries, uniforms, and footwear. We also order takeout for them and we incentivize in any way like if we get free movie tickets or anything like that, [we] pass it along to them.”

Executive Home Care, a national franchise of in-home care providers, is addressing the labor shortage by changing their technology for onboarding, recruiting, and hiring.

“Getting our franchisees… in contact quicker with each of the candidates that apply has been one of the things that has helped us recruit more caregivers quicker,” Tim Hadley, CEO of Executive Home Care, told Yahoo Finance.

Another incentive that has worked: offering flexible work schedules.

“It’s not a standard 9-to-5 or 8-to-4 type job,” Hadley said. “People are able to work the hours that they want to work with that flexibility as well as a significant amount of out the job training and continuous training for the caregivers.”

Diana Manalang, owner of Little Chef Little Cafe, Queens, NY, hasn’t been able to find enough experienced workers for her business.

Diana Manalang, owner of Little Chef Little Cafe, Queens, NY, hasn’t been able to find enough experienced workers for her business.

One perk, though, that many small businesses can’t accommodate — even though it’s risen in popularity since the pandemic — is remote work options.

“We’ve talked to a lot of folks that they want a job, but they want to work from home,” Larry Sutton, CEO and Founder of RNR Tire Express, a national franchise retailer of quality tires and custom wheels. “And unfortunately our type of business we’re in can’t do from home.”

What many business owners are doing is what has long been tried and true: offering more money. Just under half of owners reported raising compensation, according to the NFIB survey, while over a quarter plan to in the next three months.

But that may not be enough in this environment, said Allan Jones, CEO of Bambee, a company focused on solving complex HR problems for small businesses.

“Small business owners — unfortunately or fortunately — have to think about total incentive packages in ways that Fortune 500 companies have for a very long time. So not only do I make $2 more in minimum wage, but what are the other incentives and benefits of working at this organization beyond just the salary and compensation?” Jones said. “[Small businesses] notoriously do not think about total comp as a recruiting principle. They just think about cash but employees are now looking for that.”

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv

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