You have poured your heart and soul into building your business. You have got clients lining up to get your help to solve their problems and you want to solve them. Why wouldn't you? It will make your business bank account grow.
But there is a problem. You do not have much of a staff to cover up all the business that you have got.
The great resignation, coupled with demographic shifts, and a booming economy has created a labor shortage that is here to stay. Yeah, gone are the days when signs like “Help Wanted” or “Now Hiring” were met with excited applicants fishing to find luck at your company.
The particular demographic shift happening right now is the tsunami of old people (baby boomers) leaving the workforce. People are calling it ‘the silver tsunami’. On the other hand, fewer and fewer young people are entering the workforce. It is generating a massive staff shortage that has started hurting small businesses severely.
The U.S. Chamber of Commerce acknowledged the fact that staff shortages for business will persist in 2024. The most affected industries of labor shortages are healthcare, manufacturing, construction, and maintenance.
How bad will the labor shortage get in the future? We have some stats to share. At the height of the pandemic, there were 30 million U.S. workers unemployed and now the tables have been turned. According to the U.S. Chamber of Commerce, if every unemployed person in America got a job, there would still be 2 million jobs left. Labor shortage will reach 3.2 million jobs in the healthcare industry in the next 5 years (Mercer), while Deloitte says there will be 2.1 million vacant positions in the manufacturing sector.
One solution that comes to mind is immigration. There is a 76% drop in the number of immigrants. Even the immigration policies are not going to help your business deal with the employee shortage numbers we touched on.
So, to avoid replacing the vibrant hum of your business with the silence of empty positions, you must implement these strategies.
These are proven strategies that are bound to work if implemented correctly. Let’s start, shall we?
1. Become Talent Magnet
The lesser the pool of workers, the harder it is to attract skilled talent for your business. In a competitive market, you need to offer more than just ‘a job’. To do this, take some steps that can help you attract the talent:
● Competitive compensation and benefits: This one is obvious in a competitive landscape. One effective way is to conduct regular salary benchmarking and offer benefits that align with your targeted talent’s demographics (e.g. Flexible work arrangements, parental leave, and mental health resources).
● Great company culture: In this era, company culture is non-negotiable for most employees or job seekers. So, building a positive and inclusive environment where employees feel valued and respected is far more important than ever. Otherwise, they are going to jump the ship no matter how shiny the wage is.
2. Reskill and Upskill your Workforce
Your existing workforce is your greatest asset. They are the people who are running your business to fill your bank account. Take care of them by taking care of their skills. You must invest in their professional development by providing them with effective training, mentorship, and access to different learning resources. You can also take a quick look at How Startups Can Retain and Develop Technical and Finance Talent Through AI to enhance the existing talent and skills of your workforce.
What this will do is, empower them to take more effective roles in your company and be more productive which will eventually fill some gaps of labor shortage. It will also boost their morale as you are taking an interest in their skill development which makes a good relationship between an employee and an employer (owner).
3. Embrace the Evolution
What is today’s evolution? The tech. Technology should be your go-to place to solve most of your business problems. It is a friend that you can count on nowadays. There are thousands of tools and automation solutions powered by technologies like AI (Artificial Intelligence) that can help you streamline boring tasks for your employees and free up their time to tackle high-value problems.
Automation is not just for big corporations, heck NO! You can comfortably automate the processes to not only survive but also thrive in your business. Some businesses are completely automated which generates fat profits for their owners.
The labor shortage is a problem that can derail your entire business if you do not pay attention to solving this problem, it is liable to create painful ramifications for your business. This is also an opportunity to approach this issue proactively and rethink the well-being of the talent you hire for your business. Because solving the labor shortage problem is not a sprint, it is a marathon. So, put your strategic thinking cap on and implement these strategies to build the business of your dreams. You can also get some valuable insights from Thinking Outside the Box: Unique Fundraising Strategies for Early Stage Startups. Remember, the future of your business depends on your sheer ability to adapt to the changing circumstances of the job market, adjust the strategies to attract and train talent and prioritize the people on your cruise.
Aleksey Krylov is a serial entrepreneur and a seasoned Chief Financial Officer. He works with small businesses on fundraising, business development and M&A.