Posted May 24, 2019 by

5 Ways Small Businesses Can Compete for Top Talent in a Tight Job Market

When it comes to recruiting top talent, it’s always been a challenge for smaller businesses to compete with large, well-known companies. While large organizations have name recognition, big marketing budgets and fully-staffed departments dedicated to human resources and talent acquisition, smaller companies must find more creative ways to attract and retain high-quality candidates.

In today’s tight labor market, this challenge has become more formidable. Consider this: In June of this year, the Bureau of Labor Statistics reported that there are 6.7 million jobs open in the U.S. and only 6.4 million available workers to fill them. Low unemployment coupled with a shortage of talent in many areas, has made hiring a tough job for companies of all sizes, but particularly for small- to mid-sized organizations.

According to a 2018 report from Vistage International, a peer mentoring organization for CEOs, business owners and executives of small- to mid-sized companies, 61% of small and mid-sized businesses expect to increase their workforce in the next 12 months. In addition, a recent CareerBuilder survey found that companies across the globe are looking to revamp their hiring efforts to fill both temporary and full-time positions in 2019. The same survey found that 44% of businesses are planning to hire full-time employees and 51% are planning to hire temporary employees. But roughly half of all the hiring managers surveyed said they are unable to fill much-needed positions due to a lack of qualified talent.

The heightened competition for talent has increased salaries and benefits across many industries, as well as the number of company perks. In this highly competitive environment, smaller companies, who are not able to offer the same type of compensation and benefits packages, must find other ways to grab the attention of job seekers and find the best candidates for open positions. Some proven strategies include:

1. Form Relationships with Candidates

The first step in forming relationships is to “get social.” Smaller businesses must have a strong presence on LinkedIn and other social media. A Pew Research Center survey found that 79% of Americans who were looking for work used the Internet to view job listings, learn about companies and apply for jobs. Of those, 34% said online resources were their most important tool.

It’s also important for small businesses to have a well-developed LinkedIn profile. These profiles are free and offer great exposure. They help candidates find businesses that they would otherwise never know about. LinkedIn also serves as a free resume database, allowing job seekers to search though hundreds of candidates and reach out to those who are a great match. Keep in mind, however, that LinkedIn is far more popular amongst Gen X’ers and Baby Boomers than Gen Z’ers and Millennials. LinkedIn’s own statistics indicate that only 1.5% of Gen Z’ers and Millennials use LinkedIn even on a monthly basis.

In addition, forming a relationship involves being more “hands on” throughout the recruiting process. Provide company updates or news and check in with candidates via a personal phone call or email. During the interview process, include executives and managers who may be working with this person. This shows the candidate that they’re valued enough for the CEO or other executives to take the time to speak with them.

To relate with younger candidates, it’s also important to adopt a mobile-enabled application process, which means that not only must it be possible to apply for a job using an Android or iPhone, but that it’s easy to do without having to use third-party services such as “Apply With LinkedIn.” Most candidates either don’t have those third-party services, don’t know how to use them, or don’t want to use them.

Mobile devices are increasingly becoming more entrenched in our everyday life, especially within younger populations. According to Glassdoor, 89% of job seekers say their mobile device is an important tool for job searching and 45% use it to search for jobs at least once a day.

2. Attend Networking Events and Job Fairs – and Seek Referrals

When you’re shopping for caviar, but you have a fast food budget, you must work harder to find candidates. Simple job postings rarely do the trick. Even with a small staff, it’s worth the time and effort to attend networking events and job fairs. While the big company names draw candidates to an event, it puts you in good company. Not only do these events expose you to candidates who don’t know who you are, it allows you to present your company “in person.” Talking with someone face-to-face and conveying your enthusiasm and passion for your workplace and the position are more effective than a job posting. Of course, that means sending the right person to represent your company at job fairs and other events! Make sure they’re representing your company in the best light possible.

A Jobvite Job Seeker Nation Study found that 39% of job seekers rated initial contact with a company as making the biggest impact on their impression of an organization. You can capitalize on this by presenting a friendly, but knowledgeable face at job fairs, taking the time to really get to know candidates and what they want, and following up with personalized emails – something that larger companies are unlikely to do.

Small businesses can also broaden their reach by working with the right partners, such as recruiting agencies, co-ops, chambers of commerce and professional networking groups, which may result in listings in professional directories and word-of-mouth referrals.

Finally, look inside your company. Your employees can be your most passionate advocates. In fact, research by Deloitte found that employee referrals are the number one way organizations find high-quality hires. Fifty-one percent of companies surveyed named employee referrals among their top three most effective sources. Let employees know you have open positions and encourage them to share job postings with family, friends and professional associates. You may also consider offering a small bonus to employees who recommend someone who is hired. Of course, the more you rely on referrals, the less diverse your workforce will be — and numerous studies prove that diverse workforces are more productive.

3. Build and Maintain College Campus Relationships

The first step in working with colleges is to carefully research which schools are the best fit for your organization — including majors, quality of programs, student population, school location, etc. Once selected, the most successful university relations and recruiting programs take a long-term approach, building and maintaining relationships. Work closely with the career center staff to learn about a college’s culture, student demographics, degree programs and traditions. Then take it a step further by getting to know other key contacts, including faculty and administrators.

Even when your company is not hiring, be sure to maintain these relationships. Look for ways to stay involved: Can you offer a co-op or internship program (internships are a highly-effective way to find full-time hires and increase retention)? Can you volunteer to help with mock interviews or critiquing resumes? Can you speak to students about skills that employers are looking for?

Another factor to consider is whether you need to target candidates by which school they attend (or attended) at all. A rapidly increasing minority of employers, both large and small, are using workforce productivity data and discovering that the college an employee attended is poorly correlated (and sometimes even negatively correlated) with the productivity of the employee. Why? Reasons vary, but one explanation is that those who graduate from elite schools rarely stay with their first employer for as long as those who graduated from second- or third-tier schools.

If you want a diverse, inclusive and productive workforce, you should supplement your on-campus recruiting efforts with so-called virtual recruiting efforts, which typically means advertising your part-time, seasonal, internship and entry-level jobs on sites like College Recruiter that primarily target students and recent graduates of all one-, two- and four-year colleges and universities.

4. Promote Company Culture

When you can’t compete with compensation, you can still attract top talent by promoting your company’s culture and perks. The good news for small businesses is that competitive wages aren’t the only thing that can attract employees. Younger workers consider overall culture to be a major contributor to job satisfaction, according to a Society for Human Resource Management survey.

You may not be able to offer a fully-stocked kitchen and exercise rooms ala Google, but flexible work hours, remote work options, monthly workplace events, professional development courses, community-involvement and other perks can be very attractive to the right candidates.

According to a 2018 study by SCORE, a business mentoring network in the U.S., employee perks not only attract better, more qualified employees, but they are also such a powerful selling point that they can boost employee retention and job satisfaction levels. In fact, SCORE reports that benefits and perks in the workplace are often more important to employees than higher pay. The percentage of employees who took the following perks/benefits into account when choosing an employer were:

  • Flexible hours – 88%
  • More vacation time – 80%
  • Work-from-home options – 80%
  • Student loan assistance – 48%
  • Free gym membership – 39%
  • Free snacks – 32%
  • Weekly free outings – 24%

If you offer special perks, be sure to promote them. A great way to do that is to include video in your marketing efforts. A small number of job boards, including College Recruiter, not only allow you to include video within your job postings, but even let you do so for free!

5. Highlight Intangible Benefits

There are many benefits to working with a smaller company, such as greater flexibility, more diversity in day-to-day responsibilities, less bureaucracy, closer relationships, teamwork and the opportunity to make a direct impact on the bottom line. These benefits can be particularly attractive to younger workers who value “hands on” work that results in meaningful contributions from the get-go.

In addition, top talent is drawn to companies that are innovative and offer opportunities to grow and learn. You can use this to your advantage by talking about how candidates won’t be “boxed in” by a role, as happens within many large organizations. The nimble nature of small companies allows employees to wear many hats, which can be very appealing and can often compensate for a lower salary.

Today’s candidates have far more power during the job search and are also job hopping more than ever before. To succeed in this candidate-oriented job market, it’s important for small businesses to develop innovative recruiting and hiring strategies to fuel growth.

Sources:
“Best Practices for Recruiting New College Graduates,” by Mimi Collins, National Association of Colleges and Employers, NACE, October 13, 2017.
“Recruitment Statistics 2018: Trends & Insights in Hiring Talented Candidates,” TalentNow.com, February 2, 2018.
Vistage International, 2018 CEO Report on Business Growth
“What’s More Important at Work: Better Perks and Benefits or a Higher Salary,” Biospace, June 27, 2018.
“7 Tips for Small Businesses Competing with Large Employers for Talent,” Collegeforamerica,com, Workforce Insights, June 28, 2017.

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