Expert Explains Hiring and Retaining the Best Talent in a Tight Labor Market

Date: June 02, 2022

NFIB webinar explains the employment process to help recruit and retain workers

On June 1, the “Hiring & Retaining the Best Talent in a Tight Labor Market: HR Basics for Small Business” webinar was hosted by Senior Executive Counsel for the NFIB Small Business Legal Center Elizabeth Milito and Executive Director for the NFIB Research Center Holly Wade.

NFIB’s research shows that small business owners are struggling with workforce shortages. Forty-seven percent of small business owners are reporting they have job openings they could not fill, and an NFIB survey shows expectations for better business conditions in six months is the lowest it’s been in the nearly 50-year survey.

“While the last two years really demonstrated how resilient and important small businesses are to our economy, I would say that small businesses run America, the pandemic also showed some inefficiencies and deficiencies in businesses,” Milito explained. “Small business and larger businesses too, particularly when it comes to issues related to recruitment and retention of employees.”

For small business owners, it is important to re-examine the processes that are being used for recruiting employees and finding new and effective ways to retain employees.

Statistics

Milito provided an overview of the workforce issue and offered insight into habits of job seekers.

  • 23% of business owners said labor quality is their top business problem
  • Over 10 million job openings are available right now in the United States
  • Unemployment is at 3.6%
  • 50% of employees had at least one interview in the last year
  • Half the workforce will change jobs every one to three years
  • 51% of employees leave their jobs in the first two years
  • 59% of job seekers research companies’ website, social media, and reviews

“You’re never too small, if you have an employee, to think about Human Resources (HR) functions… think about how … you are managing your employees, how is it you are looking for employees,” Milito said. “Everything about staffing your business, whether you have 3 employees or 300, comes down to relationships and creating effective relationships means that you need to strategically think about recruiting, you need to think about investing in your employees. What is it you can do, what changes, little tweaks, can you make to encourage employees to stay or to come to you before they leave? Because there may be something, a small thing, that would cause an employee to stay. The goal is to retain employees for as long as possible.”

Milito explained that the number one rule in HR is to be fair and consistent. This is accomplished by:

  • Establishing good recruitment practices
  • Managing fairly and communicating often
  • Tackling poor performance early
  • Enforcing company policies consistently
  • Preparing exit strategies

She also broke down the three main stages of the employment process with practices small business owners should consider implementing.

Recruit

“Regardless of the size of your business, you need to think about cultivating a business culture and sharing your business’ mission and values during the recruitment process. It’s not just with your customers, it’s not just with existing employees, it’s much broader than that.”

Retain

“Now it’s all about retaining the employee for as long as possible because the cost of turnover is high. Organizations with high levels of employee retention have much higher customer satisfaction scores.”

Exit

“There’s going to be turnover, it happens undoubtedly. You can’t stop it, but preparing for it will minimize the pain, minimize the damage,” Milito explained.

No business is too small to have an employee handbook. It is important to have written policies, so employees know what is expected of them. NFIB has a model handbook that can be used as a starting point for small business owners that need to put one in place or update what is currently being used.

NFIB’s next small business webinar will take place on Wednesday, July 6, at 12pm and will focus on tax issues with a special CPA guest. More information will be available soon to register for Tax Essentials Every Small Business Needs to Know.

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