Small businesses are getting creative to hire hard-to-find labor

As some corporations slow their hiring pace due to economic concerns, small business owners are left behind when it comes to recruiting.

Nearly 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 could not fill those jobs, well above the 48-year historical average value of 23%.

Difficulties in hiring have prompted some small business owners to look for more creative solutions to hire labor in order to grow their businesses or—at worst—just stay afloat.

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

Small business owner, salesperson or assistant writing text on whiteboard.  A working retail entrepreneur.  Handwritten chalkboard poster with the new price.

(Photo: Getty)

Attracting, hiring and retaining quality employees is often a challenge for companies of all sizes. It’s no easier in the current times of low unemployment, high competition and a red-hot job market, which makes ready-made ideas even more critical.

For Diana Manalang, owner of Little Chef Little Cafe in Queens, New York, that means hiring high school students to help deal with staffing shortages.

“It works, 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 shoes. We also order takeout for them and incentivize them in any way, like if we get free movie tickets or something like that, [we] give it to them.’

Executive Home Care, a national franchise of home care providers, is addressing the labor shortage by transforming its onboarding, recruiting and hiring technology.

“Getting our franchisees … faster contact with each of the candidates who apply was one of the things that helped us hire more caregivers faster,” Executive Home Care CEO Tim Hadley told Yahoo Finance.

Another incentive that works: offering flexible work schedules.

“It’s not a standard 9-to-5 or 8-to-4 job,” Hadley said. “People are able to work the hours they wish to work with this flexibility, as well as a significant amount of out-of-hours training and continuing education for carers.”

Diana Manalang, owner of Little Chef Little Cafe, Queens, New York, has been unable to find enough skilled workers for her business.

Diana Manalang, owner of Little Chef Little Cafe, Queens, New York, has been unable to find enough skilled workers for her business.

One benefit, however, that many small businesses can’t embrace — even though it’s grown in popularity since the pandemic — is telecommuting options.

“We’ve talked to a lot of people who want a job but want to work from home,” Larry Sutton, CEO and founder of RNR Tire Express, a nationally franchised retailer of quality custom tires and wheels. “And unfortunately, the type of business we’re in can’t be worked from home.”

What many business owners do is what has long been tried and true: offer more money. Just under half of owners report raising their compensation, according to the NFIB survey, while more than a quarter plan to do so in the next three months.

But that may not be enough in this environment, said Alan 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 comprehensive incentive packages in ways that Fortune 500 companies have for a very long time. So not only do I make $2 more as minimum wage, but what are the other incentives and benefits of working for this organization besides just salary and compensation?” Jones said. “[Small businesses] They are known not to think of full competence as a recruitment principle. They just think about money, but employees are now looking for that.

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

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