With unemployment at record lows, your business may be facing unique hiring challenges
The United States economy has reached its lowest rate of unemployment in nearly 50 years. It’s a positive sign for the economy as a whole. But business owners will admit that full employment comes with its own set of challenges. A smaller pool of job applicants can mean that an available position at your company sits vacant for weeks or even months longer than you’d anticipated. Over time, this can have a negative impact on your bottom line.
I’ve seen my fair share of national economic swings, both up and down, in my 20 years as CEO of Associated Graphics. Here are three tips to help new business owners and entrepreneurs navigate the current climate.
1. Anticipate having a smaller team for a longer stretch of time.
The best way for me to explain this is to provide an example of a recent hiring situation we dealt with. We had brought on a new member of the team who, through our detailed interviewing process, appeared to be the best candidate for the position. I won’t get into technical specifics, but the new team member did not pan out. We parted ways after about four months and posted the job again.
What happened next may have surprised a new business owner in a similar situation: We had no new candidates. All of the applications we received during the second go-round were from people who had applied several months prior. We had already analyzed all of those candidates before and had made the choice not to proceed.
An economy at full employment means that often times the best candidates are already employed elsewhere and aren’t looking to move. To put it kindly, the candidates who are left may not have the qualifications your company needs. This situation is an example of why you need to be prepared to operate with a smaller team than you may have originally anticipated and leads into my second piece of advice.
2. Promote from within.
Looking for the perfect candidate to fill a senior position? Take a look within your existing ranks. Your current team members already understand the company culture, have demonstrated competence and will not need as much training.
This mentality will also help to build trust and instill loyalty within the company. Your employees will see that they don’t necessarily need to leave in order to attain a higher position or earn a larger salary. Promoting from within will also ease your hiring process because, in a full economy, you’ll find it’s easier to find candidates for entry-level positions.
I can speak from experience that hiring the wrong person can be a costly error. We have previously hired employees who weren’t ideal because we needed extra bodies to help handle the workload. This strategy proved inefficient. We ended up losing productivity due to time spent training and re-training these employees, and in fixing mistakes they had made on projects.
3. Keep the focus on company culture.
In a full economy, it’s easy to think that a larger salary alone will entice a leading candidate to choose your company over a competitor. This can be a dangerous mindset. A business owner who doesn’t prioritize fostering a healthy business environment can expect to see frequent turnover. Here’s why: A great employee will leave if the company culture is toxic, regardless of the paycheck.
We’ve always been competitive in regard to pay and benefits. But we feel that one of the key reasons our employees stay is because we have fostered a family environment in which team members are encouraged to share innovative ideas that will make us even more efficient. We want our people to be excited about coming to work every day.
That’s the type of atmosphere a business owner needs to prioritize in order to inspire a passionate and committed team. And in a full economy, it may also serve as the crucial extra incentive your company needs to win over a prized applicant.
This article first published in Inc.com on June 19, 2019.