On the window of an IN-N-OUT fast food restaurant in Encinitas, California on April 9.
Mike Blake | Reuters
When it comes to salaries, small business owners are usually not in the same league as larger companies.
It’s even harder now in a tight job market with rising wages and more states and localities publishing salary ranges, which can make small businesses look even less attractive from a salary perspective.
The stakes are particularly high considering that despite the slowing economy, small businesses are still in hiring mode and finding workers is not getting any easier. 86 percent of small business owners have expressed plans to hire one or more employees in the next year or two, according to an October survey by employee planning firm Homebase. Meanwhile, the National Federation of Independent Business, the main trade group for small businesses, last week reported a drop in confidence in Main Street for the tenth straight month, despite little change in the need to hire more workers.
“Owners continue to have a gloomy view of future revenue growth and business conditions, but are still looking for new employees,” NFIB chief economist Bill Dunkelberg said in a release accompanying its latest monthly survey. “Inflation, supply chain disruptions and labor shortages continue to limit the ability of many small businesses to meet demand for their products and services.”
The NFIB’s separate job report showed that 90% of job holders reported few or no qualified applicants for the jobs.
Here are five ways small businesses can level the playing field to attract top talent.
Highlight more than wages in the window
Jim Marx, director of retirement at Edelman Financial Services, recently drove past a supermarket that advertised “competitive benefits” in its storefront, highlighting perks like the company’s retirement plan, medical benefits and student loan assistance offerings. “It blew my mind to see that. They obviously want to get good talent in the door and they emphasized that,” he said.
The point: Small businesses need to ensure candidates understand the benefits of joining, beyond what is likely already a higher starting salary.
Benefits should be highlighted in job descriptions and discussed at every individual interview, during onboarding and training, said Kayla Lebovits, CEO and founder of Bundle Benefits, a fully decentralized company focused on wellbeing, professional development and team building. “If it’s just mentioned in the job description but not promoted during interviews, [a candidate] will think it’s not real.”
Include current employees in the hiring process
Lebovits considers it effective to invite employees who actively use the various advantages of the company to participate in the interview. This allows candidates to get a real feel for how benefits like the company’s home improvement grant and co-working membership grant work.
“These aren’t big prize items, but employees use them,” Lebovits said.
Having an open dialogue about benefits and finding out what is important to candidates is crucial because it sets the tone for the future. “It conveys that the candidate is important to the company,” said Victoria Hodgkins, executive director of PeopleKeep, a benefits management software company. “In this work environment, candidates want to know that, and it gives them the opportunity to ask questions and learn more.”
Examine employee usage patterns and take advantage of popular perks
Small businesses generally cannot afford to offer the full range of benefits that large companies can, but they can offer a number of highly desirable benefits that employees take advantage of on a regular basis. “Find out what people are actually using and those are the ones you should be promoting because those are clearly the ones that people value the most,” Lebovits said.
In particular, benefits related to retirement, health and welfare can go a long way towards improving the financial well-being of employees. While most workers believe these benefits are important, according to an October study by the Transamerica Center for Retirement Studies, there is a significant gap between the percentage of those citing their importance and the percentage that employers offer them. “This represents an opportunity for employers to increase the competitiveness of their compensation and benefits packages while helping their employees achieve greater long-term financial security,” the study stated.
In general, wellness benefits are also in high demand. According to a recent survey by TalentLMS, a learning management system powered by Epignosis, and financial wellness companies, a remarkable majority of employees, 68%, said they are more likely to stay in their current job longer when their employer offers financial wellness benefits to Tapcheck and Enrich. The survey also shows that 61% of employees are more likely to stay in their current job when financial training and resources are available.
Maternity leave is another important achievement worth considering. A recent survey by disability insurance provider Breeze found that most workers would prefer their employer to offer paid parental leave over vision insurance, employer-paid fitness or mental health benefits, employer-paid social events, or a student loan repayment service. 1,000 employed adults between the ages of 22 and 40 were surveyed.
Avoid an all-benefits-equal approach
It’s important to offer a range of benefits that can appeal to different people.
For example, don’t just offer yoga or meditation apps or fitness benefits; Provide employees with multiple ways to top up, Lebovits said. “People take care of themselves very differently.”
And while the Breeze study found that parental leave is more popular than sight insurance among workers under 40, that could change once they hit “reading glasses age.”
Depending on gender, age and the nature of the work environment, there can be significant differences in the types of benefits that appeal to employees.
A May PeopleKeep survey of more than 900 small business workers found that 70% of women rate the benefits of mental health as “very or extremely” important, compared to 49% of men. Women also value flexible working hours (84% to 70%), paid family leave (73% to 61%) and professional development (64% to 57%) more than men, while men value internet and phone bill reimbursement more than Women (40% to 32%), according to the survey.
Turn existing employees into referral sources
If your existing employees are happy, they will be more likely to recommend a position at the company. That means making sure existing employees are excited about the benefits you offer – and to achieve that result, you need to make sure employees feel engaged.
Sixty-two percent of respondents to a recent survey conducted by Edelman Financial said they “don’t always feel represented” in their company’s messages about performance. The mood among women is even clearer: 68% say they do not always feel integrated – significantly more than their male colleagues (58%).
An overwhelming 93% of employees who do not always feel represented said they would be more likely to seek financial wellbeing support if it was tailored to their specific background and family circumstances, the survey found.
Finally, small businesses need to understand what attracts job seekers in the first place and highlight those benefits in all their communication with candidates. According to Homebase, 70% of small businesses cited a sense of community, followed by flexibility in the workplace (69%), close relationships with colleagues (66%) and closer relationships with managers (53%).