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How Small Businesses can Combat the Labor Crisis

June 22, 2023 - Emeka Anammah

Small businesses have been hit hard by the labor crisis in recent times. The pandemic has caused a shift in the job market, with many employees choosing to work remotely or looking for work that offers better compensation and benefits. This has left small businesses (especially brick-and-mortar) struggling to attract and retain employees. The latest from CNBC shows the hiring disparity has worsened as the summer season rolls around the corner, with construction, manufacturing, and transportation industries being hit the hardest. Despite all this, there are a few things that small businesses can do to combat the labor crisis. Here are some strategies to help you navigate this season.

 Offer Competitive Compensation and Benefits

One of the best ways to attract and retain employees is to offer attractive compensation and benefits. Your businesses may not be able to offer salaries that are as high as those of large corporations, but offering other benefits such as healthcare, vacation time, and retirement benefits can go a long way in attracting and retaining employees. As with many things, hiring a worker is a negotiation and an exchange of value. If your business cannot provide remote work or higher pay, you must increase the value of your bargain in other areas such as these. Additionally, it is essential to keep up with industry standards in terms of compensation and benefits, to remain a viable option when compared with others in the job market.

 Streamline Hiring Processes

The hiring process can be tedious and time-consuming for both the employer and the employee. It is essential to streamline the process to ensure that you do not lose out on top talent due to a lengthy hiring process. Consider eliminating unnecessary steps in the hiring process, by conducting initial screening interviews via phone/one-way interviews with predetermined questions. Hiring platforms such as Indeed provide these options.  If possible, limit the interview process to one in-person meeting, optimizing the time with necessary evaluations like skills tests. This can be performed in one meeting without compromising thoroughness in hiring.

 Foster a Positive Company Culture for Retention

By extension, It is essential to prioritize employee retention if you want to get ahead of the labor crisis, as prevention is better than cure. The company culture can play a significant role in attracting and retaining employees. Be proactive in offering opportunities for growth and advancement within the company. This incentivizes the employee with a vision for the future within your business! Also, ensure that employees feel valued and appreciated by providing regular training, off-site team-building activities, and other perks. Additionally, make sure that employees have a good work-life balance, which can help reduce burnout and lead to higher job satisfaction. To most of the younger demographic in the labor force, these factors can weigh more than financial compensation. 

Leverage Technology

Technology can be a valuable tool for small businesses looking to combat the labor crisis. Consider implementing a human resources management system (HRMS) to help streamline HR processes, such as onboarding and benefits administration. Examples are BambooHR, Deel, ADP, etc. It is not wise to ‘wing’ HR processes without a firm infrastructure to manage employee wellness. Additionally, wherever feasible, embrace remote work as a way to attract and retain top talent. A report from November 2022 by LinkedIn shows that it is the most sought-after post-pandemic job characteristic and will be a major pull for many job seekers. There are many tools available to help facilitate remote work, such as video conferencing, project management software, and collaboration tools.

 While it may seem challenging to attract and retain top talent in this current job market, these strategies can help small businesses remain competitive and successful. Emphasizing employee satisfaction and well-being is key, as happy employees are more productive and will help your business thrive. Remember to stay positive and focused on the long-term success of your business.

The Alliance to Save the American Dream is a non-profit organization dedicated to three core goals.

1. Develop an Ideas Factory to give small businesses and industries a centralized place to share innovative ideas that must be considered.

2. Build a unique Resources portal for small businesses to go to for answers or resources that address a wide range of issues or challenges.

3. Offer a new networking opportunity for small business owners to connect while also giving them a platform to share their own personal stories. For more information, visit


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