How Businesses Can Overcome The Labor Shortage

How Businesses Can Overcome The Labor Shortage
Categorized as ASCEND Business Advisory, Employees Tagged ,

For the past two years, most businesses, particularly small businesses, have been hit with challenges not seen in nearly a century. The COVID-19 pandemic created conditions that test a small business’s ability to survive profitably. Supply chain shortages, masking, stay-at-home orders, remote working, and now The Great Resignation is causing a serious labor shortage. Nobody knows for sure what caused it, but today overcoming the labor shortage is a number one priority for many small businesses.

According to the Bureau of Labor Statistics JOLT report, a record 47.4 million workers voluntarily left their employment. While this phenomenon has hit hospitality, manufacturing, and retail the hardest, no industry has been spared. Every business, and small businesses, in particular, are struggling to retain the talent they have and recruit replacements. But, at the end of the day, smart owners understand that it’s people who perform the services and produce the products that go to market.

Where Did Employees Go?

With over half of small businesses struggling with the labor shortage, one has to ask, where did all these people go? There is no one universal answer, but there are trends that help explain the missing workforce. 

Some older workers elected to retire early and simply left the workforce before expected. Lockdowns resulted in many child care businesses closing. Now with demand back up and wages skyrocketing, child care has become scarce and expensive. That translates into young mothers not being able to find or afford child care, making it impossible for them to return to the workplace. 

Lastly, the pandemic has created a culture shift, and workers are looking for more control over what they do. As a result, many have decided to go into business themselves. The Census Bureau reports that business formation registrations in 2021 hit nearly 5 million, making it a record-breaking year. So, where did they go? They went to work for themselves.

Tips To Retain And Recruit During A Labor Shortage

The pre-2020 status quo simply doesn’t work any longer. Worker expectations have changed as well as customer values. Boiled down, it’s about the experience. Work has to be a rewarding, enjoyable experience. Otherwise, the worker will simply seek out a new opportunity. This labor shortage gives workers options not typically available in “normal” times.

To create a rewarding, enjoyable experience, small businesses can try:

  • If it isn’t already, you need to make your organization people-oriented. Make it clear that people are your most important resource by creating policies that clearly make employees a top priority.
  •  Today’s employees are seeking flexibility in their work-life. A company that offers sufficient flexibility to allow workers to take care of personal tasks like child care and errands is viewed as empowering.
  • Pay competitive (or higher) wages. At a minimum, pay a living wage that allows workers to live well in the area where they work. That can be a significant challenge in Southern California. If higher wages are not possible because of cashflow, consider enhanced benefits.
  • Provide training and opportunities for growth. Nobody wants to get stuck in the same job forever. Offering training or adjusting responsibilities to encourage skill-building is an effective way to provide a rewarding work experience.

Providing a safe, flexible, inclusive, and empowering workplace is a small business’s first line of defense against the Great Resignation. So, how do you translate these objectives into actionable ideas for your specific business? Contact us at William Rogers Company, where we are happy to share our extensive business experience and help you through this labor shortage. Contact us today, and let’s set a time to explore potential solutions, 888-297-3321.