We’ve all heard about the fact that businesses are finding it hard to find workers. This struggle is real and it is affecting all industries. As a result of this worker shortage, customer service is poor, product quality is lacking, manufacturers are having difficulty keeping up with orders and delivery, customers are dissatisfied and disgruntled, and employee morale is down because they must pick up the slack and do the work of two to three people. The lack of good employees is putting businesses, especially small businesses, at risk of cutting operating hours or shutting down completely.

What is causing this shortage? Do people
not want to work anymore?

As we see it, there are three major reasons for this shortage:

• Small businesses losing employees to larger businesses
• The impact of inflation on small businesses
• Burnout among frontline COVID workers

What is the state of the job market?

In general, the job market is doing well—for larger businesses. They are recalling workers laid off in 2020 due to the pandemic, and in the past year (May 2021-May 2022) U.S. employers have added 540,000+ jobs per month on average. And the Labor Department reports that employers hired another 396,000 in April 2022 (Source: FactSet).

Small businesses are losing candidates to larger
businesses that can afford to pay more.

According to an ABC News report by Mae Anderson, “hiring and retaining employees remains the top challenge for small businesses.” The report stated that a survey of 1,100 small businesses by Goldman Sachs found that 90 percent are finding it difficult to recruit qualified candidates for open positions; 42 percent said they’ve lost employees to larger businesses, with pay and benefits being the two main reasons.

The impact of inflation on small business hiring

With pay and benefits being a major issue in small businesses competing against larger companies for employees, the impact of inflation has only worsened the problem. Small and midsize businesses simply cannot afford to offer higher pay and add benefits for potential employees—especially not since most are still recovering from big losses in profits due to shutdowns during the pandemic.

Because there are fewer applicants for positions at small and midsize businesses, the standard quality of employees that are hired has decreased—a sort of “take what you can get” situation among employers has become the norm.

COVID burnout is causing potential employees to seek jobs with larger, higher-paying companies or even change their career path.

The ABC News article also cites employee burnout as a cause. Aside from healthcare, leisure and hospitality were two industries hit hard by the pandemic. “Some who stayed in the industry switched to larger restaurants where wages might be higher. Others left and looked into new opportunities.”

So, what can employers do?

Short of increasing pay and benefits, a Forbes article by Krystle Yates, titled “Seven Steps to Overcoming Small Business Hiring Challenges” offers some suggestions:

1) Define what you need. Create a realistic job description, cut out requirements that aren’t necessary, and create an environment that appeals to your hiring industry. Get rid of outdated or unnecessary rules.

2) Think outside the box. Think non-traditional hiring like two part-timers vs. one full-timer, remote work, retirees, and students who want to work in their chosen field.

3) Create an easy-to-navigate recruitment process. Streamline the process by eliminating unnecessary steps and repeated interviews. If you don’t, you may lose good candidates to those employers who do.

4) Hire the right people. The wrong people will create more work for you and can negatively impact your existing staff and clientele. Consider hiring from a temp agency if you need someone right away. This gives you some leeway in that you can try out a potential employee and make adjustments if they are a poor fit—and avoid a negative impact on staff and clientele.

5) Develop your staff. To employees, sometimes career growth in the long term is more valuable than high pay in the short term. If you can offer this even in a small way, you may be able to attract good candidates who want to improve and grow.

6) Recognize wins. Expressing sincere appreciation to employees is worth a million bucks! It has been proven many times over that if employees feel their boss believes in them, they will work harder and be more inclined to stay.

7) Communicate. Make your expectations clear and allow employees to freely provide feedback. By doing so, your employees are likely to produce at a higher level.

Don’t forget the employee background check!

Finally, it is important to perform a good employee background check, which should always include the following:

• Misdemeanor and felony criminal records searches at the county, state and national levels (international also, if necessary)
• Sex-offender status searches
• Social Security number traces and validations
• Employment and education verifications
• Professional license verifications
• Checks on references, credit reports, civil records, driver’s license and motor vehicle records
• Military records verifications
• Workers’ compensation history searches
• Healthcare sanction checks
• Address history checks
• Social media screening
• Continuous monitoring of existing employees to identify changes in criminal or other status since their hire

Why Choose The Hire Authority for Employee
Background Screening?

At The Hire Authority we are experienced, professional, and thorough in our screening, which guarantees that you will receive information that is current and relevant. We also are experts in compliance with state, federal, and county laws. We care about your security, and we will work with you to keep you safe from harm or unnecessary problems. Be safe, not sorry.

We’d be happy to talk to you about screening your employees. Call us at (508) 230-5901 or visit our website at www.hireauth.com with any questions you may have.

 

The foregoing should not be construed as legal advice. Employers should always consult their own legal counsel for advice on labor and employment matters.