While economists await upcoming reports from the BLS on inflation, small business owners continue to face an increasingly competitive labor market.
The war for talent has been compounded by inflation, making it extremely difficult for employers to offer competitive wages.
Last week’s BLS Job Openings and Labor Turnover Survey (JOLTS) showed that US job openings climbed back over 10 million—nearly double the pre-pandemic norms.
According to the monthly jobs report from the National Federation of Independent Business (NFIB), 41% of small business owners raised compensation for their workers in May of this year.
But inflation is still outpacing wage growth.
Over the past two years, wage growth has exceeded consumer inflation in only one month—April of this year.
Not surprisingly, workers are opting for the highest-paying employer.
And, many workers may feel corporate jobs are more likely to offer wages that keep pace with increased costs of living. Small businesses are on the losing end of that equation.
Second, the current labor shortage is exacerbated by an historically low labor force participation rate.
Even though the latest reports show steady job growth, this merely reflects the reality that workers are willing to switch jobs. It does not mean more people are going to work. High turnover is not surprising since only 33% of US workers are engaged with their work.
So, the people who are willing to work are switching jobs, while a significant proportion of the population refuses to show up to work at all.
And, even though wage growth recently slowed to 4.3% year-over-year, wages are still unusually elevated.
So employers are dealing with a small supply of workers who face a high cost of living, in addition to a competitive wage market.
Is there anything businesses struggling to hire can do?
A new playbook
The new playbook that small business owners should adopt is to have quality job-seeker brand-recognition.
As anyone in the marketing world knows, a business cannot simply switch its marketing on and off. Employers should create employment ads that attract talented candidates and demonstrate how their business is providing value to customers.
If you want to lure talented workers away from their current job, then you need to have an active brand, even if you don’t have an open position.
RedBalloon.work was created to provide businesses with values-aligned talent, and we not only offer employers a site where they can post jobs, but our premium recruiter service comes with hiring recommendations, market data on how to optimize job postings, and bullet-proof legal protection.
Visit RedBalloon.work today and see how we can help you save time and money by finding the right talent for your open positions right away.