We’re currently in the midst of a labor crunch. Companies want to hire, but there’s simply not enough people to go around.
A number of factors are contributing to the crisis. For starters, companies are operating in a new labor environment post-COVID. After spending a long time enclosed in four walls, many workers came to the conclusion that they deserved a better life than their jobs were offering them. They didn’t want their lives to be little more than the 9 to 5 drudgery.
They also concluded that the pay just wasn’t high enough for it to be worth it. Yes – having money is great, but it’s no substitute for happiness or meaning.
Then there is the fact that companies simply aren’t raising wages the way they should in situations like this. They’d prefer to have shortages rather than attract workers by offering higher rates.
All this is bad news for small businesses. In 2021, companies have found it harder than ever before to find the people they need to work for them. Labor statistics show that there are millions more job openings than people to fill them.
So what’s the solution? What can small businesses do?
One option is to outsource tasks to areas of the economy that are still functioning. Agencies, for instance, have to pay the going rate for labor, so they can usually attract workers, so long as companies are willing to pay the market price.
You can also outsource certain jobs and roles. For instance, if you can’t find marketers to work at your firm, get an agency to do it for you.
Employees might not be willing to commit to you full-time. However, you may be able to find staff who will work for you temporarily.
Temps will typically take part-time, flexible work. If you find a good temp, you can offer them a full-time job and see if they are willing to stay with you longer. You’ll need to convince them that you run a great company, otherwise they won’t stick around.
Offer Higher Wages
The current labor shortage is an indication that the labor market simply isn’t functioning as it is supposed to. In a market economy, shortages shouldn’t persist. If they do, it usually suggests some sort of government intervention.
As a small business, you can circumvent these issues by offering higher wage rates. Offering better salaries works for everyone. It encourages workers to return to their jobs, it provides you with the labor services that you need, and it encourages new workers into areas in which there is scarcity. Ultimately, everyone benefits.
You can also ask your existing employees to work longer hours. This isn’t always popular, but you can explain the situation and offer additional pay for each hour worked. Some workers who want to get ahead will take you up on the offer, using it as an opportunity to boost their income.
Use these strategies to overcome the current labor shortage and encourage workers back to the office.