Historically, large corporations have a recruiting edge over small businesses because of their ability to offer a full range of employee benefit packages and experiences. But, in today’s highly competitive labor market, small businesses are increasingly realizing the importance of competing with the enterprise for employees and adapting to the modern workforce.
According to a recent study for QuickBooks Payroll, nearly half of small business owners say that hiring skilled workers is getting harder. Another 39% say it’s difficult to keep the workers they already have. However, the study reveals that small businesses may have more options than they realize when it comes to recruiting and retaining talent.
Here are three ways that small businesses can enhance their value in the current labor market to be more competitive at attracting and retaining talent.
Offer benefits to improve employee retention
With rising costs of living, benefits such as health insurance, 401K, and dental and vision plans remain powerful incentives for workers to choose (and stay with) an employer. Of small business employees who receive at least some basic benefits, only 18% say that they are considering leaving their current employer. Conversely, more than 1 in 4 (27%) of those who report having no benefits at all plan to leave their current job.
To better compete for talent, it’s important for small businesses to evaluate what benefits your business can afford and how you can offer them. To make this easier, look for providers who can offer a range of benefits in one package. This can help you provide a variety of offerings with less administrative work and, potentially, lower costs. It’s also important to leverage resources and seek counsel when deciding how much your company contributes to benefits such as health care plans, versus how much employees contribute. When it comes to benefits, the more you can provide, the better – it’s worth the investment.
Embrace flexibility
The last few years have significantly transformed how and where many of us work. With the rapid growth in digital collaboration and communication tools, more people are doing their work from anywhere and at any time. Twitter made headlines in 2020 after announcing its teams would be allowed to work from home forever. Since then, dozens of companies have followed suit with their own remote, hybrid, or flexible work policies. But large corporations aren’t the only ones who can use this trend to their advantage. About 48% of small business employees list flexible work hours within the top three most valued aspects of their jobs. Additionally, 31% mention the ability to work from home as something they would highly value.
If it is not essential for your employees to be on-site, consider flexible scheduling or remote work opportunities as additional benefits you can offer your employees free of cost. While the reduced structure of flexible work makes some business owners nervous, the right tools can make this transition easier to manage. For example, some payroll management systems offer additional team management features, such as scheduling, remote time entry, and location-based project tracking, so you can accurately plan, record, and verify the hours your team members are working.
Create a work culture that aligns with employees’ personal goals
One of the key advantages small businesses have is their ability to connect more closely with their employees and to create a work culture that aligns, authentically, with personal values. This is something that large corporations invest significant time and money to achieve! Small businesses should lean into this superpower and remember that compensation and benefits aren’t the only things that keep workers in their jobs. More than 2 in 5 small business employees (42%) value work that gives them a sense of purpose and fulfillment, and 41% of those between the ages of 18-34 say that finding work that relates to their passion is one of their top values in choosing an employer.
Related: New resource digs into small business’s unique benefits, legal and insurance issues
It’s important to bring the same intention and energy to creating valuable employee experiences as you would for customer experiences. To achieve this, take time to have an open dialogue with your employees about what they like or dislike. Find out what truly motivates them, and consider adjusting their job responsibilities to better align with their passions, skills, and goals. Thinking creatively about company culture and organization can go a long way in providing a highly desired workplace.
The bright side
While today’s hiring landscape is challenging, small businesses have several levers at their disposal to attract talent. By investing in essential benefits, embracing flexible work, and creating a strong workplace culture, these businesses can recruit passionate employees who are eager to stay and grow with them.