Small businesses have always had a hard time finding good hourly workers, but those difficulties have been exacerbated by the COVID-19 pandemic, forcing many business owners to rethink how they hire and incentivize, compensate and treat part-time help.
It may seem contrarian that hourly workers are hard to find right now. During the pandemic, hourly workers suffered a 24.5% unemployment rate in April 2020, versus a 12.8% unemployment rate for full-time workers in the same month, according to a recent study by the Congressional Research Service. The worker shortage numbers, however, are very real.
Worker Shortage Numbers
In April of 2021, the number of job openings far outpaced the number of hires in various sectors in which small businesses operate, according to the latest Jobs Opening and Labor Turnover Survey from the Bureau of Labor Statistics. Those sectors include retail trade, in which independent, boutique clothing and apparel stores may operate; professional business services, in which small companies operate out of an office, and leisure and hospitality, in which independent restaurants operate.
The restaurant industry is being hit especially hard with worker shortages after suffering the most during the pandemic. Not only were roughly 110,000 restaurant establishments permanently closed due to the pandemic, but a recent National Restaurant Association study also revealed that as of the end of April, 50% of family dining establishments; 55% of casual dining restaurants, and 54% of fine dining restaurants are operating below their normal staffing levels.
Despite the establishment of the $28.6 billion SBA Restaurant Revitalization Fund, as well as the Biden Administration’s new rule that makes business meals 100% tax-deductible as a way to boost the restaurant industry, independent restaurants are still struggling with not only being able to find good help but with rising costs of consumer items, forcing them to increase prices.
Stiff Competition, Unemployment Benefits
Several factors are making hiring difficult. Small business owners are facing stiff competition when it comes to hiring hourly workers. Large, corporate stores and restaurant chains are also seeking hourly workers and have deeper pockets to pay them more than the minimum wage.
Additionally, one of the most politically contentious topics surrounding the current worker shortage is the $300 per week federal unemployment benefit, which ends in September. Economists have found that, on average, anyone who previously made less than $34,000 per year would receive more money by collecting jobless benefits than the person would be returning to work. Many politicians and trade groups are calling for an end to the benefit as a way to force people back to work. A recent survey from Alignable found that 54% of small business owners blame unemployment benefits for the reason why people are not returning to work.
On top of those factors, let’s face it: many hourly positions such as waiting tables or being a cashier were considered lousy, low-paying jobs to begin with. Many people may simply not want to go back to those jobs due to health concerns or childcare issues still lingering from the pandemic. A large percentage of those jobs were already taken by people simply seeking a way to supplement their income; students working their way through school or contractors seeking income in between jobs, so turnover in these positions was already high well before coronavirus came along.
What to do?
Despite all of the factors working against you right now in terms of hiring, there are ways to attract and retain hourly workers.
Offer more than the minimum wage.
If you can afford to, offer hourly workers more than the minimum wage. Your larger competitors are already doing it, and according to the New York Federal Reserve Board, the reservation wage – the average lowest wage respondents are willing to accept for a new job – has gone way up since the beginning of the year. Several states have already raised or are working to raise their minimum wage requirements, and you need to adjust.
Use Job Boards.
such as Glassdoor, Indeed, Ziprecruiter and even Craigslist to advertise your job. Also try to think outside the box when advertising your job. College job fairs and campus bulletin boards, for example, may land you that perfect intern, paralegal or junior accountant that you’ve been seeking. Clearly explain the salary and job requirements in those advertisements. You might even try to poach good candidates from other places. If you’re an independent restaurant owner for example, and you are impressed with a server at another restaurant, try making them a better offer.
Don’t “ghost” strong candidates.
Gone are the days when you could say to someone after an interview, “I’ll get back to you” and then wait two weeks to actually get back to them. Once you find a strong candidate, you shouldn’t take more than 24 hours to make them the best offer you can afford.
Treat hourly workers with respect.
Now is especially not a good time to treat an hourly worker as a merely dispensable one. Whether you’re an independent restaurant or a small law office, make hourly workers feel like part of the team. Include them in weekly planning meetings, or perhaps give them a say in what their hours will be. Keep in mind that many part-time workers need flexible hours, as they may have other jobs or families to take care of.