Worker Demographics Changed During the Pandemic. To Find Quality Labor, You Should Be Doing This. Small businesses are struggling to find the talent. But experts say to flip the conversation.
This story appears in the September 2024 issue of Entrepreneur. Subscribe »
Small businesses have a hiring problem.
According to the July monthly jobs report from the National Federation of Independent Business (NFIB), 19% of small businesses rank the inability to find quality labor as the single most important issue facing their company, while 38% reported job openings they could not fill. Overall, 49% reported few or no qualified applicants for the positions they were trying to fill.
"Most people who want a job have a job, so there are very few out there actively looking," says Holly Wade, NFIB's executive director of research. The U.S. unemployment rate has hovered around 4% in 2024 — and although it's been slowly ticking upwards, the talent pool for small businesses remains tight. Moreover, worker demographics evolved during the pandemic years. "There were so many baby boomers who retired, and we had a huge shift of early retirees. All of that takes time to normalize, so we have this massive shift in the composition of the labor market."
Related: 5 Expert-Backed Strategies for Hiring Top-Quality Talent for Your Startup
So how's that playing out for small businesses? Richard Grove is a good case study, because he's the founder of The Small Business Consultant, which advises manufacturing and industry companies — and he's also COO of a small business called Wall Control, which makes pegboard storage systems and organizers.
He sees the problem firsthand, from multiple angles. Younger workers have been conditioned to think of college — and jobs that require a lot of education — as the best path to success. That means tradesman jobs are "not glamorized," Grove says. "[Younger workers] don't see their heroes doing that sort of thing," nor have they been encouraged to explore an array of different professions.
That's why, when his clients ask him for help with hiring, he recommends they introduce themselves to future employees where they are now — whether that's school clubs or special interest groups online.
Wade says that hiring eager, enthusiastic candidates and then training them for the job is a smart strategy. A strong company culture can also attract workers, so it's worth leaning into what makes small businesses great to work for — like the ability to learn in a place that cares about you more than a conglomerate.
That's been a winning formula for Leah Jensen, cofounder of Parleaux Beer Lab. A brewery may seem "cooler" than manufacturing pegboards, but the hospitality industry is notorious for high turnover. "We have been very fortunate that many of our team members have stayed with us for lengthy periods — an average of over three years," she says. "Part of this success comes from prioritizing 'fit' over traditional skill sets. If we see someone that jives with us, our team, and our customers, we will put the time in to train them."
To keep employees happy, Jensen also commits resources to professional development. "Anytime the business is successful," Jensen says, "we reinvest that back into the business and back into them." This ranges from sending team members to festivals and retreats for learning and networking purposes, to investing in new equipment or upgrades to make workers' jobs easier.
Ultimately, to recruit quality talent, a small business needs to present itself as a doorway to stability and opportunity. "If you can show [job candidates] what a future looks like in the field, that's the best bet," says Grove. "All these folks are walking around with phones in their hands. So start a social media account, partner with an influencer in a similar space, and get your story out there. Let them see firsthand what opportunity looks like."
