Small Business Staff Shortages – Strategies to Cope

It’s no secret that the United States is facing staff shortages. Between the pandemic forcing different ways to work and, at times, instilling a fear of in-person working, coupled with an increasing number of early retirements and lower immigration rates, we have unprecedented numbers of job openings chasing scarce talent.

The competitive labor market has small businesses struggling to keep up with their larger competitors as candidates demand higher compensation and better benefits offerings. In fact, the National Federation of Independent Business (NFIB) ‘s jobs report shows a record 44% of all small business owners report having job openings they could not fill, 22 points higher than the 48-year historical average. This challenge spans most industries and particularly plagues organizations with limited time and resources for dealing with staff shortages.

How can small businesses overcome staff shortages and attract talent without breaking the bank?


Provide comprehensive benefits programs

Benefits packages include a variety of perks and benefits. In addition to traditional medical insurance, you may consider offering dental, vision, disability, or life insurance. You can provide pre-tax benefits such as flexible spending or health savings accounts to stretch your employees’ dollars further. You can get creative with unlimited paid time off, wellness programs, or mental health support.

Some small businesses are joining a Professional Employer Organization (or PEO) to offer more robust benefits packages. Combining their buying power with other small companies affords them the economies of scale accessible to larger businesses. This helps attract talent.


Offer flexible working arrangements

The desire to spend more time with family or the need to look after children or an elderly family member may discourage some employees from returning to work. A flexible work arrangement may be the one thing standing in the way of your next star employee joining the employment ranks. If you’re able, consider offering remote or hybrid work to battle staff shortages. Allow employees to create their own schedules and work the number of hours that suits their needs, as applicable to meet business needs. This work-life balance in your employee base will also pay off as they happily talk to others about your supportive work culture and brand.


Upskill current employees

It may take time for the labor shortage situation to improve. So, offer your existing workforce training and development opportunities. This win-win option allows employees to develop new skills and take on more senior roles within your organization. Think about career pathing differently and look at not-so-obvious talent to fill roles internally. This enables you to build a more highly skilled and productive workforce. Employers offering growth and career development opportunities will attract more job seekers.


Modernize your hiring process

With so much competition for talent, you must have efficient ways to promote your openings, screen resumes, and seamlessly take candidates through the hiring process. Consider digitizing your hiring process with an applicant tracking system. Utilize websites like ZipRecruiter to cast your net wider for potential candidates. These sites allow you to post to over 100 job boards with one submission.

Also, improve communications at every stage of the hiring process. Be clear to candidates about the next steps, and don’t leave them hanging. Focus on how you can improve the candidate experience through metrics, such as time-to-fill and vacancy rates or surveying candidates. Even if you’re turning down a candidate, they will appreciate knowing your decision so they can move on.


Create a referral program

Incentivize your current employees to recommend suitable candidates to fill roles within your organization. Allow them to help with the talent shortage! Afterall, your employees know what it takes to succeed in your organization. Tandem HR has found employees referred to the company perform better and stay longer than other hires. Not only do your employees understand the type of talent you need, but knowing their reputation is at stake, they will most likely refer quality candidates. And, you can increase the referral amount if and when you have more pressing needs. Make sure to define the parameters around the program, including how long the new hire must work before paying out any financial reward and which roles are eligible for the program.


Social media recruitment

Over 4 billion people currently use social media worldwide. The average person has 8.6 social media accounts as of 2020. Best of all, you can post on social media for free! use it to spread the word about your job openings.

It’s also an excellent tool for learning more about your applicants or proactively reaching out to those who may be a fit for an open position. You may find details on their skills, experience, and qualifications. Some, like graphic designers or writers, may even post samples of their work.


Form partnerships with schools and colleges

Use this strategy to build a pipeline of future talent for your company. Depending on your talent needs, team up with high schools, colleges, non-profits, and other local partners. You can build strong relationships with these organizations by offering young people free training, workshops, or even internship opportunities.


With the competitive labor market and talent shortage, getting creative and taking advantage of every opportunity to bring in talent is essential. Use this challenge to create strategies that allow you to not only mitigate the effects of labor shortages but also enable you to source talent that will help fuel your company’s long-term growth.