What Record Low Unemployment Means for Small Businesses in 2023
Updated: Feb 15
Depending on who you ask (or maybe where you live), we have either a shortage or too many workers.
Tech companies are laying off staff by the thousands, while the construction industry faces a talent shortage of nearly half a million, and the supply chain is battling a shortage that began years before the pandemic. And that doesn't begin to factor in the small businesses and franchises on every street corner in some parts of America that have help wanted signs hanging in the window.
While the tech layoffs make the headlines (and there's real people and real families being hurt by them--including several of my friends), I have no doubt that these employees will find high paying jobs again in the near future.
The real story is on the other side of the equation. Small businesses that can't find labor struggle to keep up with demand even with increased prices. Essential industries atrophy, but don't receive the same level of care or attention.
To make matters worse, the number of working people (15-65 year-olds) is forecasted to decline by 3% over the next decade.
In other words, things aren't looking up if you're planning to hire (unless you're in the market for a former big-tech employee--then you might be in luck).
Strategies for attracting talent
So how can you continue to attract the talent you need, even when unemployment is at a record low?
Create a company culture where people find a sense of belonging and are valued as contributors. This is how you remain competitive with other firms. While salary, location, work from home policies, and total compensation will always be important factors, long-term employee retention comes from building a company that people actually want to work at.
Embrace disruptive technology, even if that means rethinking the roles you're trying to fill. AI technologies like ChatGPT, Jasper, and Baidu are revolutionizing the way work is being done, much like Excel did a generation ago. Can you imagine a company using paper spreadsheets today? Of course not! But I'm sure there were holdouts when computer spreadsheets were first invented, and I doubt any of them look back at that and see a competitive advantage.
Hire Hungry, Humble, and Smart. Many (most?) jobs can be taught on the job if you've created a culture that keeps people around for the long term. Hire people that you'd want to work with--who are hungry, humble, and smart--and don't worry about whether or not they have the exact experience you need.
Build a loyal team of task-based partners. The future of work is task-based, not job-based or even employee-based. Most companies will find that they have a core set of competencies that should never be outsourced, but there's a whole host of other tasks that you can build an external team around, from copywriting, to marketing, to coaching, to driving alignment around your core strategy. This external team can become just as loyal as your employees, and in it with you for the long haul. It's a great way to leverage expertise, without having to invest in managing the growth of these capabilities internally. Plus, this external team is much more likely to change with the times in their relevant fields, keeping up with cutting edge trends--just like you do in your core business areas.
Record unemployment is something to be celebrated, but it's also something that companies will have to work through. These five strategies can help you stay competitive in your industry and even increase your standing as you leverage new talent, new technology, and new teams to get your work done.