Hiring New Employees When the Economy Is at Full Employment

Hiring new employees in the hottest jobs market in decades poses a challenges for human resource professionals.

The July Jobs Report from the Labor Department reported that employment increased by 157,000 in July with construction, professional and business services, manufacturing, healthcare and social assistance sectors leading the way. The construction industry has been particularly hot.

The Bureau of Labor Statistics found that construction employment continued to trend upward in July with more than 19,000 new jobs. Construction has added 308,000 jobs over the past year, with gains in both construction of buildings and in specialty trade contractors, according to the Jobs Report.

At the same time, unemployment rate is just 3.9 percent. Additionally, average hourly earnings for all private sector employees rose by 7 cents in July. This is good news for job-seekers and the economy overall, the news also means that is more challenging than ever for small businesses to when hiring new employees.

Because of the strong employment situation, hiring new employees at the entry level and early career levels is a challenge for many companies. It can be especially problematic for small businesses that might not have established a “brand name” to attract qualified candidates. Fortune 500 companies don’t have to explain who they are, and usually job applicants are seeking  them, rather than vice versa.

By many accounts, currently there are more positions available than there are people to fill them. Thus, in order to fill a position, companies have to lure workers who are already gainfully employed. This means companies have to devote more resources to finding talent and then must to pay them more money to lure them away from their current employers.

“There simply aren’t as many people actively looking for jobs as there were 5 years ago,” talent acquisition expert Steven Lindner, Ph.D., of The Workplace Group. “Most companies are putting ads on Indeed, ZipRecruiter, and other such websites and are waiting for people to apply for the jobs. That’s insufficient in today’s tight labor market.”

The challenge becomes how to reach people who may be too busy working to looking for a new job. Companies have to find inactive jobseekers and then entice them to consider leaving the place where they are currently employed.

Lindner suggests that small businesses have an advantage over big firms because in many cases they serve a loyal customer group and are usually active in their communities. A good strategy for a small business owner to find talent is to ask people they know if they are aware of anyone who might be looking for a new job opportunity.

“You can go onto your LinkedIn page or Facebook page and post that you are adding a new role at your company,” Lindner says. “People in your network may be interested in the position or they might be willing to help by asking around for you. Getting others involved in your search is a great way to widen your net. “

For instance, the owner of an expanding company might post something along the lines of:

With the expansion of our new facility, the time is right for us to hire a new director of sales. We are looking for somebody with three to five years of sales experience in the industry.  If you know someone who might be looking for this type of opportunity, please have them contact us.

Additionally, on social media such as Facebook, almost everyone is a member of a group, whether it is industry professionals, parents of middle school children, or simply people who live in the same town. Post information about your hiring needs not only on your company page, but on your individual page and also in any groups in which you are active.

Companies of all sizes are struggling to find staffing. In big cities, there is intense competition for employees with mid-level management skills. In rural areas, the local talent pool sometimes does not meet the needs of employers, which then presents the additional challenge of having to entice someone to take a new job and also move to a new area.

The bottom line is that the owners of small companies need to do more to tell customers, community, and all the people that they serve that they are looking to hire staff.

“This is what professional talent acquisition firms do, we don’t rely on job ads,” Lindner explains. “What’s great about using referrals from friend, colleague, or vendor, is that you are getting the recommendation from someone who you thinks the person would be a good fit for your company.”

Many times small businesses don’t have a dedicated HR person, and the owners themselves are strapped for time. Relying on Indeed, CareerBuilder, Monster, etc. might not yield qualified candidates. Further, some of the less employable and less serious candidates will apply for jobs because they have to show they are actively looking in order to keep collecting unemployment checks. In other words, they are just going through the motions.

“You can get a lot of unqualified candidates via job websites, and it winds up being a waste of time,” Lindner says. “That’s why executive recruiters don’t rely on ads. You have to dig deeper.”

Lindner’s advice for small business owners is to leverage their local ties to their advantage.

“Use your network to create a whole army of advocates,” Lindner says. “Word-of-mouth and referrals are a great way to reach a lot of people – even people who aren’t actively looking for a job. Then, when someone recommends you, the potential candidate goes from being a non-jobseeker to an active candidate.”

Some business owners may be cautious about hiring a friend or relative of an important client, in case the hire does not wind up being a good fit. Lindner says that if the client is a good business person, he or she will understand that not every hire works out well and that companies have to find the best candidates for the growth of their operations.

Timothy Kelly

Timothy Kelly

Chief Editor at SmallbizStar
Tim has been a writer for over 20 years covering financial markets and small business.

In addition to writing about the financial markets, Mr. Kelly writes extensively about digital marketing and SEO.

Mr. Kelly attended Boston College where he studied English Literature and Economics, and also attended the University of Siena, Italy where he studied studio art.

Mr. Kelly has been a decades-long community volunteer in his hometown of Long Island where he established the community assistance foundation, Kelly's Heroes. He has also been a coach of Youth Lacrosse for over 10 years. Prior to volunteering in youth sports, Mr. Kelly was involved in the Inner City Scholarship program administered by the Archdiocese of New York.

Before creating ForexTV, Mr, Kelly was Sr. VP Global Marketing for Bridge Information Systems, the world’s second largest financial market data vendor. Prior to Bridge, Mr. Kelly was a team leader of Media at Bloomberg Financial Markets, where he created Bloomberg Personal Magazine.

Contact Tim tim.kelly@smallbizstar.com
Timothy Kelly

Timothy Kelly

Tim has been a writer for over 20 years covering financial markets and small business. In addition to writing about the financial markets, Mr. Kelly writes extensively about digital marketing and SEO. Mr. Kelly attended Boston College where he studied English Literature and Economics, and also attended the University of Siena, Italy where he studied studio art. Mr. Kelly has been a decades-long community volunteer in his hometown of Long Island where he established the community assistance foundation, Kelly's Heroes. He has also been a coach of Youth Lacrosse for over 10 years. Prior to volunteering in youth sports, Mr. Kelly was involved in the Inner City Scholarship program administered by the Archdiocese of New York. Before creating ForexTV, Mr, Kelly was Sr. VP Global Marketing for Bridge Information Systems, the world’s second largest financial market data vendor. Prior to Bridge, Mr. Kelly was a team leader of Media at Bloomberg Financial Markets, where he created Bloomberg Personal Magazine. Contact Tim tim.kelly@smallbizstar.com

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