The Labor Shortage and What to Do About It

The Problem

According to the NFIB, 23% of independent business owners see finding good employees to be the single greatest concern they have for their business, making it the highest ranking concern of small business owners today.

When it comes to the finding employees who are eligible for employment and pass background checks, the same business owners say 25% of the time, finding qualified applicants is the most problematic for them, but 75% of the problem lies in the attitudes and social skills of these workers, rather than the basic job requirements, skills and experience of employees.

Think about this for a moment. If you’re an employer, you already know how these challenges impact both the bottom line of your business, but also the general headaches you feel as you have to consider what to do about employees, job openings and the customers they serve.

The Systemic Problem

The bigger problem is, you’re not alone in facing these challenges. Nearly every small business owner with non-family employees is suffering from the shortage of good help today. It’s pervasive. If it wasn’t, you might be one of the lucky (or smartest) ones who identified good employees and kept them on board.

But it’s so endemic to the workforce culture today, owners are spending more of their time than ever sorting through resumes, interviewing, hiring, training, disciplining, firing, or just losing, employees and dealing with the fallout that follows.

In the preceding section, we categorized workers as those who are eligible and pass background checks. But the numbers of workers who come to the scene otherwise qualified, but can’t get through a background check, is also at an all time high.

This is a very important segment of the pool of prospective employees. No one should want to put illegal aliens on their payroll. It’s cheating the system on both sides when you do. But if the situation could be met with streamlined means of proper background checking and employer sponsorship of the worker, it might be a much easier problem to address.

Even if the applicant has to return to his home country for a period of time, if he’s not a security risk and a candidate the employer wants to sponsor otherwise, it might help solve a problem on both sides if he could be brought here legally. In truth, the first and most important thing that needs to be done about immigration is to get effective control over our borders, and only allow people to come through who are already investing substantially in business in the US or have viable employment opportunities ahead of them.

The immigration issue is enormous today, but overall it’s much less impactful on most small employers than other issues regarding employees who are already citizens. Just a few days ago, a business owner told me “we spend so much time processing child support withholdings and modifications, and losing good employees who can’t afford the amount of child support and rent at the same time, it’s changed the way we have to do business.” The appearance of felonies on a background check are yet another issue that rears its head frequently in today’s job marketplace.

Finding Solutions

Immigration, child support, felony backgrounds – these are all major endemic issues employers face collectively and individually. In the end, however, for each business owner, if you can just find those employees you need to meet your own goals, and keep them on board, you’ll succeed.

Some of the answers are policy based and need attention from government. Others come down to worker attitudes and commitment. It’s good to try to separate them because the former require businesses to band together and work collectively toward a better system for producing and providing workers into a high producing economy, and the latter demands a different kind of approach toward the improvement of worker’s abilities to bring basic ethics of work to their employers.

Public Policy

There are at least a few policy changes that should help small business considerably:

  1. Lessening the burden of proving cause for termination in unemployment cases for employers and raising the bar for employees to claim unemployment compensation to begin with. The period benefits can be offered should also be shortened, especially given the general availability of employment in the market presently.
  2. Extending the use of 1099 contractor options for employers to allow more workers to be classified under 1099 status rather than W-2 by increasing the amount that is paid to a contractor before the employer must report the compensation, and making other changes in the law that reflect the job market of 2019.
  3. Improving and streamlining the background checking process, so that the particulars of a felony conviction can be brought forward more readily and quickly to allow an employer to determine the fitness of an employee.
  4. Removing the general burden of child support reporting and distribution from the employer, who isn’t obligated to pay the support in any direct manner, and making it easier to apply simple methods when withholding of support is actually necessary.

Private Business Considerations

There is a new program developed by Landmark Advisors, which has recently contracted with an independent, employment testing service to help small business owners track, mentor, train and counsel new hires with the goal of increasing the average tenure of employees on staff with a company.

This service designs a multi-phase process whereby each new employee is secondarily interviewed and tested before hiring, and then goes through a weekly mentoring process for the first 90 days on the job to help get them off on the right foot and keep them on board longer than their recent predecessors.

The process is meant to be mandatory for selected new employees, and the mentoring can be done through Landmark or by the employer, if preferred, but training is then provided from Landmark to the company for its employees. 

Finding good help today is deeply problematic. But the potential to increase profits and expand your business is well worth the effort.

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