A very hot topic among Business Owners, at least the ones that we work with every day, is that of being so busy with new business growth. However, with massive business growth comes the need to hire more employees quickly. Rather than getting into a negative mindset and giving up, therefore putting even more pressure on current employees, a proactive approach is the best one.
“When we are no longer able to change a situation, we are challenged to change ourselves.” – Viktor E. Frankl, Man’s Search for Meaning
Being overwhelmed and overworked is one of the nails in the coffin to team culture. Employees that don’t feel valued for their time and efforts are already looking for greener pastures, and if you don’t think that your employees are looking elsewhere you’re likely mistaken. A recent survey from March 2021 said that 52% of employees are looking for, or intend to look for, a new job this year, compared to 35% in 2019 and 2020. Another reported a staggering 81% of workers that would leave their current position for a better offer.
Sounds pretty dire? It doesn’t have to be. Keeping great employees is something we talk about often, but solutions for hiring in a labor shortage are easier than you think. Here’s some tips:
DON’T WAIT TOO LONG
On average, in our experience, it takes about three months to recruit, hire, and onboard a new employee. That doesn’t count training them to do the job. The mistake we see most often is that Business Owners wait too long to hire an additional person, or even two, when things are busy. Three months is a long time for overworked employees, and the risks to your precious team culture are great. Have two fantastic candidates and can’t decide between them? Consider hiring them both. If they’re going to be revenue-driving, and your business is on a path to rapid growth, you don’t want to let a great candidate go.
Our rule of thumb is that if you have enough work for a half of a person, so if you’re hiring full time that’s 20 hours a week, then it’s time to hire a full time person. If your existing turnover is on the high side, and some industries are, then consider hiring when you’ve got even less than 20 hours’ work. According to the Bureau of Labor Statistics, the average turnover rate is 57%. But, some industries are notorious for high turnover like Retail (67%) and Restaurant (72%), which we believe is under-reported. How do you calculate your turnover percentage? Take the number of people that have left your company and divide that by the number of employees.
EVALUATE YOUR PAY
Now more than ever, it is important to evaluate your rates of pay. What you’ll find is that the businesses that are paying above what the market is paying are not having trouble hiring people at all. Take retail for example. Costco has recently announced that their minimum wage is going to be $16/hour. Their average rate of pay for hourly workers is a whopping $24 an hour. Target, Best Buy, and Amazon have made their minimum wage $15 as well. Walmart, however, and some other retailers have been stuck at a minimum of $9-$11 an hour for years. Where is an ideal candidate going to go? Certainly not Walmart. And in order to stay and grow and keep the fabulous benefits that are provided at Costco, they’re not going to want to leave either.
For your industry, look at the rates of pay for people doing the same job. If the average is $30, offer $33 and expect the best. A great employee is going to pay for themselves over and over again with a great attitude, superior customer service, and efficient work. Take the hourly rate off the table by making it super appealing so you can focus on the perfect cultural fit. Focus on training, development, and retention of someone great.
MARKETING: NOT JUST FOR CUSTOMERS
Have you ever thought about marketing for a new employee? Most companies have some budget for marketing (albeit rarely enough), but marketing your company for the target market of the perfect employee is absolutely critical. Let your current customers know that they are getting the best. Be sure that your perfect candidate is coming to you waiting for a position, not the other way around. Beef up your referral program for current employees – they know the vision, mission, and culture of the company more than anyone. Fantastic employees are waiting to work for a great company, and if yours is aspirational in their eyes you’re going to recruit the best.
Your marketing plan should include video, featuring not just the owner, but current employees, and speak to more than pay rate. Project in your culture video the mission and vision for the company, what it’s like to work there, and emphasize unusual perks of the job. Create buzz around your business as a place that people want to work. Here’s a fantastic video from our client The Cleary Company. (We’re here to help if you need marketing assistance too)
This labor shortage is not the end of the world, and a proactive approach can help to mitigate some of the headaches that a lot of Business Owners are seeing. Great people are hard to find, but developing a plan and taking action can make sure that those people are finding you.
Are you having trouble keeping great employees? Are you growing and need to hire more labor? Does your team culture need a tune up? Do great candidates know that you’re out there? We can help. Schedule your no-cost, no-obligation business analysis today.