Recruiting Strategies for Small Businesses Amid Labor Shortage

Recruiting Strategies for Small Businesses Amid Labor Shortage

U.S. Labor Shortage CEOs and Business Owners Share Their Recruiting Strategies

Finding and placing top talent into the right positions in your business is already hard enough, but what happens when you need to do it in the middle of a labor shortage? 

That’s the challenge facing most businesses today. 

The pandemic has changed the way many of us do business. There are about 3.5 million fewer people in the workforce compared to pre-pandemic levels. Many people are choosing to stay home due to challenges finding child or elder care, unsafe work environments, and low wages. In addition, an unprecedented number of workers are choosing to retire early. Businesses that struggle to fill positions with skilled workers may have to stretch their resources, which can result in damaging consequences long term. 

But, there is a way that you and your business can navigate the current crisis. It takes a little creativity, innovation, and a willingness to change. 

In this blog post, seven business owners share how they navigated the challenges of the labor shortage and came out for the better because of it. 

Increase Wages and Compensation

It should be unsurprising that increasing wages and compensation is the quickest way to attract top job applicants. Your strongest candidates will understand that their skills are in high demand. You simply can’t attract the vast majority of top talent without competitive compensation. 

In a labor shortage, the talent pool shrinks with more bargaining power in the hands of job seekers. This imbalance allows candidates to request more pay in exchange for their skills and shop around for jobs that meet their requirements. 

Double-check that you’re offering a high enough salary relative to your industry, location, and the experience required for the job. You also want to offer some perks, like flexible schedules, performance bonuses, and health insurance to sweeten the deal. 

“Our number 1 tip for finding talented people even despite the unprecedented labor shortage is to compensate more. Workers are not fooled by gimmicks such as bagels in the office or extra vacation time. Employees want increased compensation. Our plan has been to sweeten our compensation and commission structure. Our base salary for W-2 employees has been increased well above the minimum wage and our commission structure for our 1099 sales team has also been enhanced to offer higher compensation even for low-performing salespeople.”  – David Reischer, Hiring Partner at

Offer Great Benefits

Offer Great Benefits 

Offering outstanding benefits is another way to attract and retain employees. According to a study by Glassdoor, benefits like a ping-pong table, yoga classes, or free food aren’t meaningful to most employees. What your employees really want is things like health coverage and paid time off. According to the same study, the top five benefits that employees looking for include:

  • Medical, dental, and vision insurance
  • Vacation and paid time off
  • Performance bonuses
  • Paid sick days
  • 401(k) plan, retirement plan, and pension

Alina Clark, Co-Founder & Marketing Director of CocoDoc, explains how offering great benefits helped her company:

“Our first move was to offer more incentives than just the cash aspect. The top talents are often attracted to environments that offer more than just payment. If anything, the pandemic has made most employees view money from a different perspective. First, we have highly flexible working hours. We don’t employ people on an eight-to-five anymore. It’s not reasonable. We also offer health and wellness perks that have definitely attracted a few more top talents our way. Dynamic rant zones, where employees get to chat on everything they want remotely, or physically have kept the workspace upbeat, which means that more people are incentivized to stay with us for longer. We also invest in futureproofing our employees. This means that we cater for training on different areas of interest, for every employee. As an employer, future-proofing employees using on-work training shows them a readiness to stick with them in the long-term.” 

Innovate Your Recruiting Efforts 

A labor shortage means it’s a candidate-driven market. So the only way to stand out to job seekers is if you innovate your recruiting strategy. There are several ways you can make your business stand out and attract the right talent. 

  • Live recruiting events:  Live recruiting events are a great way to get to know candidates in a more relaxed setting. For example, you could host a conference or other networking event and invite guests to participate.
  • Social media: Leveraging social media is another way that you can boost your recruiting efforts. And the ways to reach out to candidates via social media are endless. For example, you can create a social media post or video explicitly reaching out to the public for referrals on Facebook. In addition, social media platforms like Facebook allow you to post job openings on your page. Next, you can use Twitter to build connections with others in your industry and tap into their networks. Finally, LinkedIn has always been a great place to search for new job candidates. With a bit of creativity, you can make social media work for your recruitment efforts.

John Ross, CEO of Test Prep Insight, states,
[…]In terms of hiring, things are so tough for employers right now that I’ve actually resorted to trolling YouTube comment sections for talent. Seriously, that might sound crazy, but recently we’ve been looking to hire a new video editor and I was having such poor luck through the normal channels that we’ve turned to YouTube directly for help. We’ll find commenters on relevant videos about editing and ask them directly if they’re looking for work. And to be honest, it’s actually worked out pretty well. We recently hired a new guy based out of Minnesota that I found through YouTube.

Have Flexible Job Requirements 

Another way to tackle the labor shortage is to ease your hiring requirements. Before you bristle at the thought, consider this, to fill vacant roles, nearly 40% of businesses eased their hiring requirements last year. 

 And the number one requirement that hiring managers are increasingly giving leeway to? Previous related experience. 

Focusing only on job seekers with a particular degree or super-specialized experience can severely limit your chances of landing a top candidate. A better tactic is to focus on candidates with transferable skills. You can always train new employees on the specifics of the job later. 

“Requirements for specific degrees or long work experience in a specific industry could rule out candidates who actually are qualified. The applicant’s potential to do the job is more important than whether they went to college or how long they’ve been a manager. If you shift the focus of the job’s qualifications to skills and knowledge, you’ll likely get more responses from high-level applicants.” – Jon Hill, Chairman & CEO of The Energists

Tap Into Your Existing Networks 

One way to handle the labor shortage is to tap into your network to begin your search for job candidates. Before hopping on a job board to post your ad, try asking for referrals from your team. Asking for referrals can save you a lot of searching through cover letters and resumes. It can also help you when conducting interviews. 

Job boards only give you access to active job seekers, but your network connects you to passive job seekers, people open to a new job but not actively looking. Passive job seekers are often an untapped candidate pool. Expanding your candidate search to include passive job seekers may make landing the ideal candidate much easier. 

Implementing a simple referral program with a bonus for successful hires can be a great help when you’re having trouble finding talent.

“Of course, retaining the staff you already have is the easiest and best way to avoid the problem. One way to do this that can also help to resolve some of your hiring woes is to offer upskilling or reskilling for niche/high-level positions. You may need to hire still to fill their old role, but it’s easier to find qualified candidates for lower-level jobs (and it won’t impact the company as much if the person you hire ends up being a poor fit).” – Jon Hill, Chairman & CEO of The Energists

Broaden Your Horizons

To navigate through the labor shortage, you need to adapt to a global mindset. First, try to shift your talent management from a local to a global perspective. Hiring and engaging with talent from around the world gives you a competitive edge. This practice not only helps you attract and retain more and better talent, but it also helps to diversify your team. Having a global team will infuse your company with new and fresh perspectives, which helps innovation, business performance and opens you up to newer markets. 

In fact, building a more global and diverse team can have a significant impact on employee retention. Consider this, over 60% of job candidates seek diverse workplaces. The number is even higher for millennial workers, with over 83% saying that having a diverse company culture is key to keeping them engaged in the workplace. When you have a global mindset, you can overcome often hidden biases that hinder engagement in your workplace and limit your growth abroad. 

Anthony Russo, Founder, and CEO of Russo’s New York Pizzeria & Italian Kitchen, who dealt with his own labor challenges, puts it this way: “We have no choice but to adapt to the new change.” 

With over 100 job openings across all of his restaurants, Russo also grappled with the realities of the labor shortage. After he personally replied to 200 applicants about the job openings but only received two responses, Russo decided to think creatively. His solution? To sponsor two employees from Dubai, UAE, to come and work in America. Their familiarity with his restaurants in international locations made them ideal for the roles. 

Go Remote

Go Remote 

With the recent pandemic, many businesses pivoted to allow their employees to work from home. And there are good reasons why you may want to make the change permanent. For one, turning to a remote workforce can help you attract and hire from a wider pool of candidates. Instead of sticking to an area code or state to search for talent, with remote work, you have the potential to hire from across the globe. With a wider pool to choose from, you have more chances of finding the perfect fit.

Moreover, when people don’t have to relocate to take a new position, it eases the stress for both you and the employees. Moving to a new city can often be overwhelming, and many employees facing this change often leave their new company shortly afterward. Offering remote positions removes this obstacle and eases the transition between jobs less awkward for employees. This also opens the opportunity for working with companies like We Are Working to help your business be remote-ready and provide remote staff for your administrative tasks, like bookkeeping and data entry.

Kenneth Reaves, the Owner/Editor of Perfect Captain, recently switched to a remote workforce to attract top talent with perfect results:

“With the US labor shortage, I am one of those who decided to hire remote workers from across the globe. Since the work-from-home setup has become normalized, I have already accepted the possibility that this would be going on for a long time and have expanded my team to include top talents from overseas. I now have more than ten people in my team who are from other countries, and working with them has been a very pleasant experience, and I’m planning on keeping them even when things go back to normal.”

It may be a while before business returns to pre-pandemic levels, but until then, with a little smart thinking and ingenuity, you and your business can navigate the labor shortage. We invite you to explore our services and what we can do to help your business streamline processes, like your recruiting efforts (or just delegate some of your not-so-favorite tasks to us). We can take on your tasks while saving you time and money, so shoot us your questions.  


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