NFIB

Small Businesses Could Benefit During Wave of Layoffs
03/ 28/ 2002

It's old news that the slowing U.S. economy has led to numerous layoffs and hiring freezes. But a glimmer of good news during these tough times is that small business owners are finding it easier to attract and retain new employees. A year ago, many small business owners reported the tight labor pool made it difficult to woo potential hires with bonuses and added perks. But now it's more of an employer's market. In today's Workshop, Jeffrey Moses discusses how to interpret the economy in terms of your small business.

The main source of added workers is from the high-tech layoffs and overall slowdown in the tech industry. Even large, established tech companies are reducing salaries, increasing small businessesÆ ability to compete for outstanding employees. This is especially true in concentrated tech areas such as California and the Northeast.

What does this mean for you as the owner of a small business? Three things in particular:

1. If you've been thinking of adding to your staff, this might be a good time to find high-quality employees -- and you might be able to land them at more reasonable salaries than you could have a year ago.

2. Your current employees are less likely to jump to another company.

3. You'll begin receiving more calls from executive search firms, trying to get you to hire new employees with sterling track records.

Before you begin building a bigger staff or scaling back salaries and perks of existing employees, however, remember one fact: there's nothing longer than an employee's memory, especially when it comes to how he or she was treated during a shift in the economy.

Your company is in business for the long run, and the key to your long-term success is not only hiring, but retaining, dedicated, loyal employees. If you are understanding of your employees' needs and do the best you can to maintain their financial status quo, they'll know you truly value their work and will reward you with increased dedication.

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