Have you ever had trouble finding someone qualified to fill a position at your small business? Struggled with attracting and retaining good employees? Invested time, effort and money to get a new hire trained only to see them leave a few months later? These are just a few of the staffing challenges and frustrations facing small businesses today.
It’s no secret that small businesses fuel the American economy. In fact, Forbes Advisor recently noted data from the U.S. Small Business Administration that shows 33.3 million businesses in the United States qualify as small businesses. That accounts for 99.9% of all US businesses. And while the majority of small business owners are solopreneurs, small businesses have been responsible for approximately two-thirds of all new US jobs during the last 25 years.
This is a significant number, but it doesn’t come without challenges. And staffing remains near the top of that list. According to Guidant’s 2024 Small Business Trends report, recruitment and retention is second only to inflation and price increases when it comes to top challenges among small business owners.
Of course, every industry and profession has its own set of issues that contribute to staffing challenges. For example, we know that the accounting profession’s staffing challenges result from a handful of factors. Issues like the huge number of accountants approaching retirement age, the 150-hour rule, a declining number of accounting majors, and a stereotype that depicts long hours and overworked staff.
Despite their differences, most small businesses continue to struggle when it comes to finding and hiring new staff. So, for those who may have missed the prerequisite for this class, you might want to sign up for “Staffing 101: What to do before hiring anyone new.”
For the rest of you, class is now back in session.
A short lesson on small business staffing challenges
A 2024 small business report from Wizehire confirmed that one of the biggest obstacles for small businesses is attracting top talent. In this survey, 43% of enterprises reported difficulties, and 41% cited increasing competition for highly qualified hires.
NFIB’s June 2024 Jobs Report echoes these findings. According to NFIB’s chief economist William C. Dunkelberg, “The number of small businesses with one or more job openings they can’t fill remains at exceptionally high levels.” The report found that 60% of owners were hiring or trying to hire in June, and 85% of those business owners had few or no qualified applicants for the positions they were looking to fill.
Just to hit home how far this reaches, consider these findings from Ramsey Solutions: 11.3 million small business owners are struggling to find employees. “That means over one-third of small business owners can’t find workers to serve customers, restock supplies, run production lines, transport products or do thousands of other jobs that allow owners to operate their businesses as usual.”
When it comes to attracting, finding and retaining qualified staff, small businesses face unique challenges, such as:
- Limited budget for competitive salaries and benefits.
- Lack of brand recognition compared to larger companies.
- Time constraints for recruitment and hiring processes.
Despite these challenges, small businesses remain the backbone of job creation in this country. And they can offer some benefits over larger corporations, such as providing employees with:
- Bigger and more meaningful personal impact and engagement.
- More flexibility with scheduling.
- Increased value as a member of the team.
- More encouragement to think creatively.
- Additional opportunities for involvement and growth.
- Greater sense of community.
- Better company culture.
Money isn’t always the biggest motivator, so small businesses need to recognize what they bring to the table that larger businesses don’t. And they need to listen to existing employees and job candidates to learn what job seekers are looking for.
‘Traditional’ isn’t a bad word
The word traditional sometimes gets a bad rap. It may be old school, but it isn’t always a bad thing. And it isn’t a bad way to approach staffing challenges. In fact, here are a few traditional and proven strategies small businesses can use to find top talent:
- Provide competitive compensation and benefits.
- Offer flexible work arrangements.
- Expand your search radius (to find remote workers where appropriate). And don’t forget to provide them with the tools they need (like OneSpace) to be effective remote employees.
- Look for remote workers in areas that may have a lower cost of living.
- Build a strong employer brand.
- Streamline the hiring process.
- Use employee referral programs.
- Set up a career page on your website.
- Utilize job boards.
Wizehire’s small business report found that 49% of small businesses rely on employee referrals from internal teams as their primary recruitment method. Job boards were also noted as highly effective for 45%, while 44% noted their business career pages as a viable recruitment tool.
And while traditional recruitment methods and strategies can be effective in helping you find new employees, you’ll likely need to do more as the small business landscape continues to evolve.
It’s time to get creative
If you want to make an A+ on your recruitment, you’ll want to get a little more creative. Plus, when you get creative in the way you look for and try to attract new hires, you reveal a lot about your company brand and culture. You show potential employees that not only can you think outside the box, but you’re willing to.
And let’s be real: In today’s job market, creativity can give you a competitive advantage.
Here are some creative ways to find new hires:
- Leverage social media platforms—Showcase company culture and values and engage with potential candidates through targeted content.
- Host industry events or workshops—Position your company as a thought leader and network with potential candidates in a relaxed setting.
- Implement a try-before-you-hire approach—Offer freelance or project-based work to assess cultural fit and skills before making a full-time hire.
- Partner with local educational institutions—Get to know and build relationships with career placement teams at area colleges and universities, develop internship programs, and participate in career fairs and guest lectures.
- Use non-traditional job boards and platforms—Explore industry-specific forums, associations and communities to partner and engage with.
- Implement an employee-led recruitment initiative—Empower current employees to become brand ambassadors and offer meaningful incentives for successful referrals.
- Consider alternative work arrangements—Offer remote or hybrid work options if possible, and explore job sharing or flexible schedules.
- Tap into underutilized talent pools—Partner with organizations to support career changers or returners and consider hiring retirees for part-time or consulting roles.
Don’t let this list limit you. Do your homework and use this as inspiration for taking your creativity to the next level. Whatever you’re doing to build the culture in your small business, you need to showcase in your recruitment efforts. From offering flexible work hours, work-from-anywhere options, childcare and/or health-related allowances to bring-your-pet-to-work days, team outings and service projects, it’s show-and-tell time! You want potential employees to see exactly why they should join your team.
It’s time to hit the books
If you’re ready to make the grade and find top talent for your small business, you’ll likely need a combination of old-school and creative strategies. Small business owners are resilient and determined by nature, and overcoming staffing challenges is just one more subject to master. By highlighting your company’s unique strengths, you can snag top-notch talent and pass with flying colors.
Thanks for attending today. Stay tuned for Staffing 103, where we’ll review the must-have items for your new hire onboarding checklist.
Class is dismissed.
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