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Labor shortage solutions for small business owners

 As businesses rebuild—and in many cases, expand—after weathering the COVID-19 pandemic, they are faced with another challenge: a nationwide labor shortage. 

Data shows that consumer spending is on the rise in the United States, with vaccinated citizens flocking to physical locations more and more instead of solely utilizing online options. The increase in activity poses an urgent need for business owners to beef up their workforce.

However, it’s proven difficult to fill job openings. A recent study found that 80% of surveyed industrial and manual services businesses (meaning non-office or professional organizations) are having either a very or somewhat difficult time hiring new employees. 

The best way to ensure the issues in the job market don’t slow down your business is to rethink your hiring strategy and explore other ways to entice qualified candidates. 

Revamp your hiring approach

Your traditional method of hiring may not work in today’s labor shortage. Revisiting your strategy and implementing the following ideas could result in an influx of potential new employees. 

Hire interns 

Students are always looking for ways to expand their skill sets and pad resumes. Creating an internship program not only provides a worthwhile opportunity for students, but also provides a labor solution for your business. 

The good news is that it’s not difficult to get started hiring interns during a labor shortage. You have several options as to what type of program you’d like to implement. If you are looking to hire high school students from your community, you can utilize a student-learner internship program

With this kind of program, you would likely work through local high schools and trade associations to find candidates and align your program with students’ needs. 

You can also create a college-credit program, which can be achieved by connecting with local universities and colleges to find students in need of an internship. Get the rest of the details in our article on everything you need to know about hiring interns

Start an employee referral program 

Your existing employees are often the best source for finding the right candidates for open positions because they know the role inside and out and can better identify who would be a nice fit. Even in a labor shortage, you may be surprised by the results that incentivizing your employees to bring you referrals could yield. 

You can set up an effective referral program in 5 easy steps: 

Identify your hiring priorities

When hiring new employees for your small business, consider offering rewards for all open positions if you have the budget to do so.
If not, prioritize roles you need filled the quickest, positions that have been open for the longest, and critical openings that you can’t go any longer without filling. 

Set the right rewards

Most businesses start by using cash as an incentive to provide referrals. Employees can receive a smaller amount when submitting a referral, like a $5 coffee gift card, a more substantial sum like a $100 gift card when their referee is hired, and finally, you can set up an official bonus payroll system and offer a heftier amount if that new employee completes 90 days.

Other prize alternatives are to offer paid time off in return, or to implement a drawing for a much larger prize like a TV or small weekend getaway. You can also offer a prize to the employee who gives the most referrals at the end of a month or a year if you’re on a tighter budget. Or, you could even offer a bonus to the employee whose referrals have resulted in the most hires.  

Write a referral policy

Lay out your expectations of what type of employee you are seeking for each role so your team can make smarter decisions about who to refer. You also need to detail how the referral process works, as well as what the incentives actually are. You can start by viewing this referral policy template. Once you’ve got it squared away, keep it in your employee handbook

Make the referral process easy 

Your employees won’t use the referral program if they can’t figure it out. When hiring multiple positions, send a separate email for each role so your team can forward them to potential referees. You can also draft a canned message for employees to send to potential candidates to ensure all the details are included. 

Then, set up a communication process to remind your team about the referral program and the rewards they can receive. 

Measure success 

A program isn’t worthwhile if it doesn’t produce results. Make sure to track the following: 

  • Overall volume of employee referrals
  • Number of referrals per employee 
  • Comparative costs highlighting what you paid out in rewards vs. what it could have cost you to recruit those candidates on your own or externally
  • Ratio of referrals to hires 

Modernize your recruitment technology

Having the right technology on your side can help broadcast your job openings on a wider scale. It can also boost your chances of finding the employees you need—and fast. 

Homebase hiring jumpstarts your process by making it possible to create a job posting in just a few clicks. You can start with our library of pre-written, customizable job descriptions. Then we’ll post it to all the top online job sites for free. 

Once your job is out there, you can even boost it on platforms like Indeed, Facebook, and Craiglist. You’ll be able to track those applicants and identify the best ones with screener questions. You can even message them and schedule interviews—all from the Homebase dashboard. 

Outsource what you can

Assess your team’s workload by tracking their time spent on different tasks. Review everyone’s day-to-day responsibilities and identify their core tasks to determine what, if anything, is slowing them down. 

There are likely administrative and maintenance duties that could potentially be outsourced. These can include cleaning, delivery, and other responsibilities that can be handled by other people. 

Analyze how much time it would save for each employee to focus on other areas of your business. You might find that some open you can delay hiring for certain positions by divvying up the work. 

Learn more in our article on how to hire contractors for your business

Offer better perks 

The best way to win out in a labor shortage is sometimes as simple as providing better offerings than other businesses. 

Higher wages  

Take a look at your current compensation plans and reevaluate them. How do they compare to that of other companies in your industry and location? Do some research to learn what the financial new normal looks like. Use a cost of living calculator to determine what your employees should be making in order to be comfortable in your city. 

Better benefits 

It may not be in your budget to raise the wages for all open roles. But providing the right benefits to supplement your team’s pay can often have the same effect. Consider increasing your paid time off (PTO) plan, adding a comprehensive healthcare package, or implementing signing bonuses to attract top talent. 


The pandemic resulted in the realization for many employees that a life/work balance is not only possible, but essential. Highlight in your recruitment process that you are willing to get flexible with shift scheduling. Learn what their preferences are and assure your candidates that you will factor that into your schedule building every week. 

It’s also important to simplify time-off requests and shift-swapping processes. Homebase makes it easy both for employees to communicate about trading shifts, and for you to sign off on the swap or accept a request for leave. 

With a revamped hiring strategy, outsourcing plan, and added employee perks, you might find that the labor shortage isn’t as scary as you think. If you need more help finding top talent for your team, get started with Homebase hiring. We’ll post your job description on the leading sites and help you find the perfect candidate. We’ll even streamline the onboarding process by sending your new hires a digital packet. 

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