Hiring challenges for small business

Hiring challenges for small business

lsnt22-crop-600x338As the unemployment rate continues to decrease (5.3 percent in June), employers report finding it more difficult to recruit high-quality workers to hire.

Small businesses are particularly challenged by this trend, since they don’t have the same resources as larger businesses do in terms of recruiting departments, the ability to offer wages and benefits packages that are attractive enough, and/or training programs to bring unskilled or under-skilled applicants up to required qualifications.

“Many smaller enterprises simply don’t have the resources they need to find the best, most qualified candidates,” said Holly Wade, director of research and policy analysis at the National Federation of Independent Business (NFIB). “In these businesses, there are generally no human resources departments that can dedicate themselves to hunting out candidates.”

Adding to the challenge is that, even when the availability of potential employees is low, small businesses must be even more careful than large businesses when hiring. “Small businesses have less ability to absorb unexpected financial blows, making them more cautious when it comes to hiring anyone who doesn’t match the job description completely,” said NFIB’s Wade.

Furthermore, training tends to be a challenge. While large companies can afford to create and roll out programs to train newly-hired, unqualified or under-qualified individuals, small businesses rarely have that luxury.

The NFIB regularly polls its members on various questions, one of which is what their biggest problems currently are. Last month, 13 percent of respondents reported that labor quality was their Number One problem, the highest percent since 2009. In fact, more than 80 percent of small businesses that were hiring said they had few or no qualified applicants for their open positions.

A recent article by Reuters Media noted that, while a wide range of businesses are having trouble attracting high-quality workers, the problem is particularly difficult for small businesses: “Separate data shows a fast rising share of small business owners say their biggest problem is the quality of labor, suggesting companies could soon raise wages more aggressively to attract talent.”

The article profiled one business owner, Garry Floeter, president of CHC Mechanical Contractors, a construction firm in Cookeville, Tennessee. “I am desperately looking for new people,” he said. In fact, he had to turn down work for one potential customer because he didn’t have enough employees to handle the job. Currently, Floeter is trying to recruit workers from as far away as Michigan and Florida, and is also raising wages to attract qualified talent.

The Reuters article also noted that Kelly Services, one of the nation’s largest providers of temporary employees, has had more trouble this year filling orders than it did last year. “We’re having to go back to customers and talk about wage rates,” said George Corona, chief operating officer for Kelly Services.