Hiring the Right People in a Tight Labor Market

Ten years ago, who would have thought finding and retaining good employees would be a problem? Unemployment was so high, and jobs were so scarce that people were permanently checking out of the market. But now, with unemployment at historical lows – 3.7% in September and October 2018 – finding good employees is a problem for more than half of small businesses, according to a survey by Indeed, one of the top job websites in the world. However, there are ways to make hiring the right people and keeping them easier. 

Even though times are good for businesses of all sizes, adding valuable employees is currently seen as an obstacle to scaling up. While 56% of small business owners said it is somewhat difficult or very difficult to find and hire the right people, 51% of them hired a new employee within a year of the study and 36% expected to grow and need even more people in the coming year. 

Let’s face it, though, it’s a corporate world and for small businesses to compete, hiring the right people who have their choice of employment options can be challenging. To compound the problem, the retail industry has one of the worst employee retention rates – 59% separations – according to the Small Business Chronicle

A recent article in Retail Dive points out that 29% of human resources professionals at 53 major retailers recently told consulting firm, Korn Ferry, that they saw employee turnover increase 81% during 2018 compared to 76% in 2017. 

National Retail Federation Foundation President Ellen Davis says small retailers face three core challenges in hiring.

Finding employees who are ready to hit the ground running:


72% of small retailers struggle to hire the right people with the skills to be immediately successful.


61% are challenged to find good candidates for entry-level positions.

Developing efficient training methods:


Small business owners spend an average of 38 hours each month training employees.


47% of those owners have trouble finding time to train existing employees to handle training.

Lowering the cost of hiring and training:


Retailers spend an average of $2,700 to train a new employee.

Employment experts say there are several ways businesses can find good employees and hire the right people, though, even in a competitive job market.

Pay More 

Offering higher wages is easier said than done. With health care benefits constantly rising, minimum wage increasing, and the cost of products swelling thanks to import tariffs, paying employees more is a challenge. However, with the cost of replacing an employee running approximately 33% of their annual salary – $15,000 for a worker earning $45,000 per year – it’s wise to offer new employees and retain current works with competitive wages. 

The Indeed survey of 1,000 randomly selected small businesses shows that 37% of them look to hire the right people by offering higher salaries. 

The Benefit of Benefits 

More pay isn’t the only carrot many potential employees want. Flexible hours, open paid time off (PTO) policies, child care, continuing education, opportunity for advancement and other benefits are often just as important to workers as top-level salaries. Small business owners can get creative and offer benefits some larger companies can’t. 

Here are some great employee benefits offered by American companies and small businesses: 

Sell Company Culture 

Not everyone wants to work for Walmart (2.1 million employees), Amazon (613,000) or IBM (over 380,000 employees). There are plenty of great places to work both home and abroad, and in the age of startup businesses of all kinds, these smaller, more agile and flexible companies offer new hires an opportunity to have an impact and make a difference. 

For small businesses to compete with the behemoths for top-notch employees, human resources experts say they should sell them on their company culture and what a great place they have to work. Businesses located in areas with great skiing, hiking or biking, rivers, or near lakes or beaches can use those resources as additional perks. 

Those kinds of activities are also often ingrained in the culture of many small companies which have corporate softball, cycling or running teams or groups. Some companies organize group ski vacations, trips to ballgames, concerts or festivals to further develop their culture and cohesiveness.


Unlimited vacation days. Student Loan Hero, Articulate, Impact Health, Teaching.com, GitHub, Bonfire, MWI, Bloc and others feature jobs with unlimited, and sometimes required, vacation days. 


Dog-friendly workplaces. San Francisco game developer Zynga, which has a dog in its logo, allows employees to bring their furry friends to work every day.  


Paid leave for new parents. 


On-site workout classes.


Free beer on Fridays. 


Catered lunches throughout the week.


Housing assistance or provisions. 


Professional development stipends. 


Free season ski passes. 


Midday surfing. Patagonia’s corporate headquarters in Ventura offers company bikes, volleyball courts and daily surf reports for employees who want to catch a wave at lunchtime.

Be Flexible 

Another way to stand out from the crowd of recruiters is to be as flexible as possible with working conditions. Four-day work weeks are an attraction for some employees. Many companies allow employees to work from home if their work permits. 

Retail merchants often hire lots of part-timers to work shifts that cover business hours that run anywhere from eight to 12 hours. While that may work from a logistics standpoint, it also creates workers who aren’t invested in their employer’s business success because they might be working several jobs to make ends meet. Full-time employees tend to be more fully engaged in their jobs and ultimately the success of the business. 

While a workforce full of part-timers might not be completely desirable, retirees, disabled individuals and other people looking for supplemental income can plug holes in your schedule if you can make their work hours fit their lifestyles. 

Hiring Time 

In the current job market, finding qualified or even capable applicants is sometimes hard, but there are several strategies that can make finding a keeper easier. 

Write good job descriptions. A Wall Street Journal report says how help wanted advertisements are written has a significant bearing on worker success. The study by North American researchers cited in the report shows that advertisements focused on what a company can do for a job candidate are more successful than ads that listed job responsibilities and expectations, as most help wanted ads do. 

Use teamwork. Business owners who are happy with their current employees can use them to find new teammates. Referrals from your best employees are valuable because they already know what it takes to work for you, and they aren’t likely to refer somebody they don’t think can do the job. Merchants can encourage referrals by offering incentives such as signing bonuses or paid time off for finding a successful candidate. 

Consider your customers. Small business owners often know their customers by name, and if they’re enrolled in a loyalty program, they often know more than just names. They know their address, phone number, email address and purchase history. That intimate knowledge and established rapport makes loyal customers possible recruits or, at least, good sources for referrals. 

John Sullivan, a human resources expert and author, suggests a light-hearted and more creative approach to hanging a Help Wanted sign in your business. Instead, consider one that says: “If you like shopping here, maybe someday you’d like to work here.” He also suggests encouraging employees to wear buttons or T-shirts that say: “Ask me about what it’s like to work here.” 

Look to the past. Sometimes it doesn’t hurt to consider past employees or job applicants to fill open positions. Often people leave jobs for reasons outside the workplace, and they might consider returning because their circumstances have changed. Likewise, if you had an applicant who didn’t quite make the cut during the last round of hiring, give them another shot. Both these situations demonstrate why it’s important to keep resumes and applications on file. 

Closing the Deal 

In a tight job market, sometimes employers must move quickly on a candidate. Office Vibe reports that even though it takes an average of 27 business days to make a new hire, the best job candidates are often off the market within 10 days. 

Ultimately, employers must consider a candidate’s personality as much as their job skills. How well a candidate fits in with the current workforce is crucial in maintaining esprit de corps.  

Nearly 10 years ago when unemployment hovered around 10%, employers could be choosy about people they hired. Today, with approximately 6 million jobs unfilled, it takes a marketing effort and bidding process to land a new hire. With proper planning and execution, hiring the right people for your organization is possible. 

Brian Bullock