In the News: Hiring Growing and Wages Steadying?

[Pesso]

Hey Sellers,

This week we’re talking hiring and wages, with an article from Small Business Trends detailing steadiness in small business job growth and a drop in wage growth in the US. I can’t wait to hear your thoughts on how hiring and wages are going for your business too. 

Small Business Trends: U.S. Small Business Job Growth Remains Steady Amid Slowing Wage Increase

According to the article, the rate of small business job growth in the United States stayed virtually the same from April to May, increasing the same amount both months. This stability is definitely a hopeful prospect, which could mean that hiring is continuing and small businesses are staying up and running. The other interesting bit is that wage growth is decreasing, with employee pay staying flat across businesses, which can mean that hiring has gotten easier and businesses don’t necessarily need to keep raising wages in order to attract new employees.

Hiring was always tricky in my shop, especially in 2022. Most years we got 75 to 100 applications for our jobs, but in 2022 that dropped down to around 30. It was a lot harder to interview and hire good candidates. We also had to consistently raise wages every year or two in order to stay competitive and keep current and prospective employees interested. Even if it was only a $0.25 to $0.50 increase, our base pay for new employees went up pretty consistently, no matter what. 

What’s your perspective:

• How has hiring been going for your business?

• Are you increasing or steadying wages for your employees?

Can’t wait to hear your thoughts!
Pesso

[rtfulk]

We work state fairs and before Covid we had no problem finding help at any fair we went to and salary was reasonable between 10-14 per hour. After Covid everything changed, we can not find help in any city we go to now. We go on a 5 month trip to the Midwest to work fairs and what we have had to resort to bringing our help on the road with us. We now pay a base salary of 200 a day while setting up and working. Travels days they are not paid, we also pay for lodging which is now VRBO’s , instead of hotels.  The world has definitely changed since Covid.

[Pesso]

Thanks for sharing @rtfulk !

Wow that sounds super challenging to not be able to find local folks to work anymore. What have been the implications of having to bring folks with you rather than hiring locally, other than the lodging costs? 

[rtfulk]

@Pesso  Finding people we can trust, when we leave in July we will be on the road for 5 months working throughout the Midwest. We will be riding together and sharing houses we rent. Fortunately for us one lady that travels with us is our age and we all get along well. Two of the fairs we work we will fly in her neice to help us work that, we will fly her in for the first fair and then she will travel with us for a little over a month then fly back home.

The hardest part of the trip is hardly any downtime. We have all our fairs lined up in a row, some of the fairs we breakdown in the morning drive 3 hours then start setting up for the next one. I think from July 15th to Dec. 8th we have a total of 6 days that we will have off.

[Pesso]

Thanks for sharing more, @rtfulk --

Oh wow, that's pretty intense in so many ways. Is it still cost effective to fly them in and do all of that? 

That's a lot of work and so little time off!

[rtfulk]

@Pesso Yeah it is, we see a sales increase when we have people working the floor. We also find out people spend more time in our booth when greeted upon entry and make that instant bond. They seem to ask for help or ask questions more freely, which generates more sales.

[Pesso]

That's pretty incredible! So glad that you see such a hug impact and return -- definitely sounds like it's worth it!

[LocavoreStore]

We've steadily been adding about 1 additional hire to payroll per year... To keep people interested, our co-workers automatically receive a $.50 raise every 6 months (unless there are some glaring issues that might warrant withholding that particular incentive). Sales and growth seem to keep pace, offsetting the additional expense. We have a pretty light hearted workplace. Everybody seems to genuinely enjoy being at there, and being around their other co-workers (I know that I do)… We have very little turnover. This makes all the difference in the world, and it's worth every penny.

[Pesso]

Thanks for sharing @LocavoreStore -

That’s so wonderful that your business has consistently been growing and supporting & needing more hires and regular wage increases! 

It sounds like you’ve built a great place with a great culture — definitely worth it! So happy for ya! 

[Catchpenny]

We also offer regular raise increases of 1-2% per quarter to help keep up with inflation. We've found that offering sick days and regular wage increases has completely eliminated employee turnover as well! That saves us money in the long run by reducing the amount of training we need to do for new staff.   

[Pesso]

Thanks for sharing @Catchpenny 

Thats so wonderful to hear that you’re able to keep things so stable with regular increases and perks! That’s a huge savings in training and a great way to keep and build a good positive culture going. So great!

[rjonin]

This is a great topic.  

I'm at the point in business where it's time to hire at minimum a part-time person.  My industry requires training & state licensure; on-site training is also critical.  I'm deciding how to structure my compensation plan...commission only, commission + salary, fringe benefits, etc.

But, it's good to know that wages are flattening a bit. Nonetheless, I'd still like to offer a competitive package to get the build the best team.

[Pesso]

Thanks for sharing @rjonin !

Thats a big step to start hiring, especially when there’s so much involved from a logistical standpoint, and so many decisions to make. Where do you start? 

[JUYBoutique20]

This year I'm looking to hire at least one part timer and put my youngest son on payroll as well.  

[Pesso]

That’s so exciting, @JUYBoutique20 !

How are you going about the hiring process? 

Rooting for ya! 

[JUYBoutique20]

We have a job hiring fair coming up at the mall my stores are located in.  I plan to do on site interviews and call the candidates I really like back in for a follow ups.  I usually have a few people stop in every week asking so I'm praying for a few great candidates.

[phillipsrw]

It's difficult to find quality candidates for job vacancies, the pool of available talent is limited and it doesn't seem to be improving, further worsened by Brexit and reduced access to talent in mainland EU. We have seen wage rises of 10 to 20%, with government imposed wage increases for minium wages and also retention based increases. Its a very difficult jobs market out there at the moment.

[Pesso]

Thanks for sharing @phillipsrw - 

Sorry to hear that it’s been so challenging. How do you typically advertise and recruit new hires? 

How do you handle those forced increases? 

[phillipsrw]

@Pesso Hey it's just the challenges of running a small business, no biggy.

Recruitment varies depending on the role, head office roles, marketing, finance, sales and design we head to professional recruitment sites, more local roles for our shops we pull from the local talent pool, seems to work well.

As for pay increases, just got to bite the bullet and roll with it. When times are tough we usually do the opposite to most and go out and recruit some more highly talented individuals to join the family. We work to the multiple of 7, each new addition to the team contributes at least 7x thier salary, so it covers thier cost and drives the business forward. It's worked so far 😬

[Pesso]

Very interesting, @phillipsrw -- what do you mean when you say the new additions contribute 7x their salary?

[TheRealChipA]

After believing that I had a full staff, my business took a sharp upswing in year-over-year growth.  I was drowning in an ever-growing list of tasks I was letting slide.  So, I hired another employee.  In my ice cream shop, my only real job requirements are a) be dependable and on time, b) be nice to the guests, and c) do your assigned job!  I/we can train anyone to do what we do.  It isn’t rocket science after all, like my first career!  LOL

I found it easy enough to find candidates, even though I’m only offering part-time seasonal work.  It helps that our pay is a little more than competitive, of course.  On that subject, every season we bump the base hourly rate for returning employees.  They also share in the weekly tip pool, and no one has reason to complain about what they receive per hour from that.  Usually the mix of returning-to-new employees each season is enough to balance out small rate increases for the returning employees.  And we do, as needed, increase our prices but a few percentage points each year to offset and net increase in total staff hourly rates.

Usually I hire by first asking my employees (most high schoolers and college freshmen/sophomores) if they know anyone looking fun work for more than fair pay.  That’s always worked for me about 80% of the time.  Indeed, surprisingly enough, has worked for me for the other 20%.

Probably my biggest employee challenge these days has been the generational shift in attitudes toward work-life balance.  I’m a Boomer.  I’ve never worked any less than 50 hours a week since I was 20.  It’s the way I was raised.  I definitely agree that this wasn’t the best way to live my life, however, and understand Gen Z’s aversion to it.  I’ve learned to change my staffing to accommodate the fact that I’m constantly getting requests off for this concert, that camping trip, etc, etc, etc.  I’m over staffed, but I no longer have scheduling issues because I’ve given myself breathing room for the unexpected.  Also, I’ve learned not to care when someone complains about not getting enough hours.  I remind them why I’m over staffed, and why they can’t complain!  LOL

Honestly, I have no complaints.