Surviving a labor shortage

Succeed in a competitive hiring environment with these five ideas

The labor force goes through cycles, ebbing and flowing due to a number for factors, including birth rates, retirement rates, and the match or mismatch of skills to available jobs. When business owners face a labor shortage, it can impact company efficiency, project backlog, scalability, and even employee morale. You can succeed in a competitive hiring environment with these five ideas:

1. Raise wages

As the labor market becomes more competitive, recruits can enter the job search with higher expectations for their starting salary. Not only that, but a recent study found that “On average, job hoppers have seen a 35% salary increase over the last 3 years—nearly double the increase experienced by tenured employees (18%).”¹ One tactic to attract or retain top talent is to raise wages. Developing a strong relationship with your finance department, accountant, or financial institution will help you gain a strong grasp of your holistic financial situation. Knowing in advance the salary ranges that fit your operational budget will prepare you to enter negotiations with your best offer.

2. Improve benefits

If your bottom line can’t accommodate a wage increase, take a wider view of what you offer employees. Do you offer a retirement plan? Could you find a way to add this to your employment package? Or perhaps you can simplify direct deposit by working with a trusted financial institution and setting up an employee banking program. If that bank can also offer financial education to your personnel, you create the opportunity to empower your employees to have a healthy grasp of their finances and how far their money can go. Perhaps the same bank can offer HSA or FSA accounts, which provide tax benefits to account holders and support vital expenses like healthcare and childcare.

Any services or products you can offer that can improve quality of life and reduce the effort it takes to maintain accounts or benefits can provide peace of mind and improve employee morale and loyalty.

3. Increase efficiencies

Automation is often linked with machinery and AI. Automating finances, however, can reap major rewards by reducing labor needs, improving cash flow, and optimizing capital.

If your finance department is small — or even just you — then treasury management products can streamline payables and receivables. Additionally, products like Positive Pay can simplify approvals while adding a validation step that helps to prevent fraud.

Sweep accounts can automate moving excess funds into savings accounts or paying down a line of credit. Investments are a key strategy to grow assets, but investing strategically can be a lot for a small business to manage — investment sweep accounts can remove the headache from this process. A trusted treasury management advisor can explore options with you that can best meet your goals.

4. Maintain your network

Recruiting top talent should not be a stop-and-go process; it should be an ongoing practice. If you are part of professional or industry organizations, take advantage of their events to network and meet people who might fit your team. Keep your connections active, even when there is not a specific open position. The future is unpredictable, and you never know when an opening in your company will match perfectly with someone in your network. The more often you have soft conversations with potential talent, the easier it will be to track down the best candidates if you need to hire fast.

5. Consult a trusted financial guide

A trusted financial guide will understand your unique situation and can identify opportunities that you may not have considered. Perhaps you could take out a loan to train new employees or to purchase equipment that can increase efficiency. Perhaps a line of credit will provide capital to invest in an innovation that could create new profit opportunities for your business strategy. By meeting regularly with someone from your financial institution, they will better understand your situation, your needs, and your goals. This will allow them to offer solutions tailor-made for you.

If you are feeling the pressure of a competitive labor market, contact your local First Financial Banker today to discuss what solutions might work for you.