Full employment is an economic situation in which all people who are available and willing to work can find a job at the prevailing wages and conditions of the industry in which they seek employment. Full employment is generally considered to be when the country’s unemployment rate is 4% or less. However, zero unemployment is impossible to achieve, as there are always some people who are temporarily out of work.
Talent Needed
Considering 4% as the benchmark, the US economy was at full employment from January 2018 to February 2020, just before the COVID arrived in the US While the pandemic sent the number of jobless people soaring in April 2021, the unemployment figure dropped to full employment again in December 2021 as the economy quickly rebounded from COVID lockdowns.
The ability of small business owners to thrive depends, in large part, on their ability to recruit, attract and retain the best talent possible. In the post-pandemic business world, the war for talent is as fierce as ever. With the economy near or at full employment for much of the past decade, companies have struggled to fill jobs from entry level to the C-Suite. Often, the only way to fill a vacant position is to attract someone who isn’t actually in the market for a new position.
“Many small businesses share with me that they’re having a lot of trouble finding people who will actually come into work and stay,” says Mary Kier, a managing partner and leader of Family Business Practice at global talent firm ZRG. “Anyone thinking about how to maintain lower labor costs should seriously think about recruitment process outsourcing (RPO) as a hiring function.”
Mary Kier is a managing partner and leader of the Family Business practice in the Chicago office of … [+]
An RPO firm, such as Massachusetts-based Hub Recruiting, will bring a person into a company to act as an extension of HR. That person will then help to quickly hire 20 engineers, or 10 sales reps, or five customer service people – whatever the company’s needs might be. Kier says it’s a better alternative to posting on LinkedIn and then hoping and praying that the post is going to give you the right people.
“RPOs provide a strong supporting mechanism to the HR person within any small company that just doesn’t have the bandwidth to do all the recruiting on their own,” she said.
Some companies are having a hard time attracting talent because they are now requiring workers to return to the office. Following a period when many positions were either fully or partially remote, this can be a big mistake for an organization that is looking to hire strong talent. Business owners who ignore the new realities of the labor marketplace are likely to learn this lesson the hard way when they encounter difficulties filling vital positions.
Organizational leaders have to learn how to navigate new realities. According to PricewaterhouseCoopers chair Tim Ryan: “The war for talent is over. Talent won.”
Ryan says the US economy has moved from the work paradigm built during the Baby Boom (born from 1946 to 1964) and Gen X generations. Today, learning firms are mandates to return back to the office harder to sell to today’s workforce consisting of Millennials (ages 25-41) and Gen Z (under 25).
“We’re seeing the best, most innovative companies doing that,” Ryan said of workplace flexibility.
Baby Boomers retirements cause an experience gap
Many firms are finding that Baby Boomers, once the largest segment of the population, aren’t easy to replace. They came of age in an era when workers were expected in the office 8 hours a day, 5 days a week. Baby Boomers are also a highly educated and experienced segment of the population. The people who replace them will often assume leadership roles that they haven’t had before.
Thus, it remains a challenge to hire senior leaders, particularly at small companies that can afford to make a hiring mistake.
A growing option is hiring interim executives, since not every internal staffing need is permanent. Interim hiring can be a good solution, especially for companies that are nervous about a recession and might not want to hire a full-time controller, for example.
Companies worried about the recession may not want to make permanent hires at this time.
“Bringing in an interim can help you through a tough time,” Kier said. “For example, maybe you have a need in marketing but are worried about affording to bring in a full-time person who will help you with marketing initiatives. You can bring in fractional marketing person who will two days or four days a week or maybe full-time for a short duration to help you with marketing.”
Meanwhile, to attract younger workers, business owners should consider allowing ongoing remote working situations, flexible schedules, project-based contracts, and/or temporary jobs to fulfill staffing needs. The bottom line is that hiring has changed, and small companies are now looking for creative solutions, including RPOs, temporary hires, and hybrid remote/in-person scheduling to address their staffing needs.
Today’s workers are looking for flexible arrangements, including the ability to work from home.
Labor costs are often the largest cost factor of a small business. Managing those costs by attracting, hiring, and retaining good talent — rather than constantly searching to fill key positions — is an important element of financial success.