How Small Businesses Can Address Talent Shortages

As talent shortages persist across industries, many small businesses are grappling with the need to adapt to this “new normal” to address this challenge effectively. Small businesses are encountering a significant shift in which they find themselves dealing with an inadequate number of applicants or insufficient resources (e.g., budget and staffing) to meet the high demand for candidates. In certain scenarios, some organizations are facing both issues at the same time. This post explores the reality of ongoing talent shortages and how small businesses can address them.

Understanding the New Normal

Many organizations are starting to accept that talent shortages are the new normal. A 2023 global trends report from talent experience platform HireVue found the following about the current hiring landscape:

• A lack of qualified candidates was the top hiring barrier for employers for the third consecutive year.
• Many organizations faced reduced hiring budgets due to economic uncertainty, despite their hiring needs.
• One in three hiring leaders turned to technology to meet hiring demands with fewer resources.
• Continued resignations have resulted in employers increasing compensation, investing in learning and development allowances, and doubling down on internal mobility.
• Employers emphasized internal mobility to address hiring challenges and added contractor roles.

Addressing Ongoing Talent Shortages

Talent shortages aren’t going away soon, so small businesses must continue pursuing creative ways to do more with their resources. Strategies small businesses can implement to address and combat talent shortages include the following.

• Prioritizing skills-based hiring. While specific qualifications may be valuable for some roles or industries, small businesses can consider candidates based on desired skills rather than experience or education.
• Supporting internal mobility. Small businesses shouldn’t forget about their current workforce. Many employees are willing to transition to job roles within the organization for higher compensation, better work-life balance and new learning opportunities.
• Focusing on retention. A renewed focus on retention can help small businesses avoid having additional open positions to source or recruit for.
• Leveraging technology. With limited time and resources, small businesses can use technology to streamline tedious and time-consuming processes and workflows and expand recruiting efforts with online platforms.

Employer Takeaways

Small businesses must explore alternative hiring approaches relentlessly to maximize their existing resources. The most successful organizations are those that can be agile amid uncertainty and focus on workers’ skills instead of only experience or education.

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The above information does not constitute advice. Always contact your employee benefits broker or trusted advisor for insurance-related questions.