Over the past year, small business owners have expressed record confidence in their local economies and as a result, many are attempting to expand their business or increase hiring. However, this growth has been somewhat tempered by one of the tightest labor markets in half a century.
With the San Diego unemployment rate sitting well-below the national average at 3.2 percent in December, our region is faced with such a battle for talent that the San Diego Economic Development Corporation recently launched its clever “Just Say No to Winter” campaign to attract talent from colder metropolitan areas.
According to the most recent Bank of America Small Business Owner Report, 67 percent of business owners plan to expand this year, and 27 percent are looking to hire. At the same time, 58 percent say it is difficult to find qualified talent. Many owners say their inability to find new employees is having a direct impact on business growth.
Yet there are ways for businesses to stand out from the crowd when competing for talent locally and across the country. Here are three tactics identified in the Bank of America study that can help attract talent in this tight labor market:
1. Shift to a More Flexible Culture
Small businesses are often heralded for having less bureaucracy and offering more creative freedom versus large corporations. Business owners should embrace that reputation and even look to build on it by offering a more flexible workplace culture. This can mean anything from offering the option for employees to work remotely or set their own hours, to switching to casual dress every day rather than just on Fridays and holidays. In fact, the Bank of America study found 57 percent of entrepreneurs are already offering flexible hours to attract talent, and 33 percent are offering flexible work locations.
2. Use Social Media More Actively
Posting updates and photos on social channels is also a good way to market yourself, not only to potential customers, but to prospective employees. Through platforms like Facebook, Instagram, LinkedIn and Twitter, you can share content that highlights your company’s culture and allows prospective employees to get a sense of what working with your company might be like.
Many business owners report that they are using social media to reach out to new talent. Social media provides a cost-effective method for companies to reach a wide audience of potential new hires. In addition, social media allows for people to easily share your job postings among their own networks.
3. Offer Higher Salaries
At the end of the day, we all know that compensation — be it salary, benefits, or a combination of the two — is often the determining factor in choosing a new job. Therefore, it is no surprise that 17 percent of business owners say they are offering higher salaries to attract prospective employees. When the job market is this tight, businesses need to be able to compete on salary to attract and retain workers.
Before making an offer to a job candidate, try to get a sense of what your competitors are offering and make sure that your package is competitive. Job hunters value company culture and workplace environment, but if you aren’t offering at least comparable benefits, you may find it challenging to secure the top talent that can help your business thrive.
Small business owners are planning for 2019 to be a year of growth. To meet their goals, they will need to make sure they have strong teams in place. Today’s successful entrepreneurs are taking a holistic and competitive approach to hiring, considering their culture and social presence as well as salary to ensure they are poised to stand out in the current crowded labor market.
Julian Parra is the senior vice president and regional commercial banking executive at Bank of America Merrill Lynch. He serves as vice chairman of the board for the San Diego Regional Economic Development Corporation. The EDC’s mission is to maximize the region’s economic prosperity and global competitiveness.