4 min read

How to Win the War for Staff During a Labor Shortage

We’re in a labor shortage that might last for years. In this post I share a simple and powerful strategy to help small businesses stand out in the job market and hire the people they need.
How to Win the War for Staff During a Labor Shortage

In August 2021, there were 10.4 million open jobs in the United States.

That’s a lot, it means that the competition for workers is hot. JPMorgan, the investment bank, came out with some analysis that suggests the labor shortage might last for years. It’s not great news for small businesses who need good people to deliver their products and services to customers.

So it’s likely that hiring and retaining employees will be top of mind for small business owners for years to come. My best tactic is to avoid the need for hiring in the first place. However, that’s not always possible. In this post, I’m going to share my top strategy for small businesses to attract and retain high-quality staff during a tight labor market.

The answer isn’t on a job board

Job websites are not that helpful during a labor shortage.

That’s because job boards are open to everyone, so all your competitors are there too. Sure, you should participate to pick up the few employees you’re probabilistically likely to attract to your ads and business (you have to play the game). But it isn’t a solution.

Staffing companies have the same problem. They have every business coming to them for employees, but the same lack of people looking for work. They also have to share the staff they can find around all their clients, so you likely won’t get any special treatment or all the staff you need. Again, play here if it makes financial sense but it’s unlikely to be the solution.

Plus, there is no way for your business to stand out on a job board and with staffing companies. To the people you’re trying to hire you look that same as all the other businesses that are desperate for staff.

No, you need to take control of the problem to really improve it.

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Taking control of your hiring pipeline

To take control of the problem you need to build your own talent pipeline, and use your existing personal connections to fill it with people who have an existing affinity for you, your business, your employees or one of your customers.

Where better to look for reliable and trained employees that you have already worked with, trained, and who are familiar with your business?

Granted this takes more effort than posting job ads and using other search channels, but desperate times call for desperate measures. It will take some trial and error, and not all of your outreach will be successful. But over time you will build up a list of qualified employees, who are familiar with your business and have a warm introduction from a trusted party.

With the right sustained effort this will grow into your best source of new employees. There’s an added bonus too. When staff come from a recommendation from a friend they are more likely to be reliable, trustworthy and work harder.

How to build your hiring pipeline

Building a staff pipeline requires a simple process of talking to your network and asking them for referrals.

Here’s how to set up your staff pipeline:

  • Step 1: Set-up a database. You can do this on paper, but it’s preferable to keep your database in Microsoft Excel or Google Sheets. Fire up a new spreadsheet and label columns for: Name, Contact Details, Referral Name, Referral Source and Notes. It’s always best practice to keep this database up-to-date, even if you’re not currently hiring.
  • Step 2: Try to rehire previous employees. Get in touch with previous employees and ask if they’re looking for work or in need of a change. If not, maybe they’ll know someone suitable. Ask for the referral and you have a qualified lead on your hands.
  • Step 3: Ask current employees for referrals. Send out a message to all your current employees or talk to them one-by-one. Simply ask if they know someone suitable for a role who is trustworthy and open to work. Take down the name and ask your employee to make an introduction.
  • Step 4: Ask family and friends for referrals. The next stop is friends and family. They are normally happy, and excited, to help out a small business owner. Repeat the same process of referral and introduction.
  • Step 5: Ask customers for referrals. The order here is intentional. You may have satisfied your hiring requirements after Step 2, so you don’t need to proceed to Step 5. However, if you still have open roles it’s time to ask friendly customers for referrals and introductions. They’ll often be able to think of someone, and be happy to do a favor for a friend who needs a job and a small business where they are a customer.

Make sure you record all the names you collect from previous employees, current employees, family, friends and customers in your database. This will be your go-to resource next time you go to market to hire staff and means you’re not starting from zero next time.

That’s it, rinse and repeat for a steady pipeline of qualified staff.

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Final thoughts

I’m a firm advocate for considering hiring new employees only once you are confident you are doing the right work, using existing employees effectively and have a good employee retention rate and there is a strong business case. I lay out my reasoning in this post if you’re interested.

If you do need to go to market for new people, I hope this post has given you a practical and valuable way to approach it, that is different from the standard approach every other business takes. This will allow you to stand out and, hopefully, attract the best people for your business.

Even better, your database gets bigger and more valuable every time you complete this exercise.

Before you go...

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The little optimisations, the high-impact tweaks and the 1% gains you can make to your business to make it a little better, a little more profitable and even a little bit more pleasant to run.

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