Hurricanes. Gas prices. Growing old. Some things are simply out of your control. But just because you can't control something doesn't mean you can't prepare for it.
Take, for example, the labor problems plaguing the restaurant industry right now. The Washington Post reports that restaurant owners are having trouble recruiting talent to their kitchens. As with any labor shortage, the root causes are complex, but restaurateurs can take steps to minimize the impact. Small-business owners in any field should take note of these these three lessons from the restaurant industry's labor shortage.
1. Location Is Everything
One reason some owners struggle to staff their kitchens is the high cost of running a business where their restaurants are located. Restaurants typically have tight margins, so it’s hard to offer higher compensation. That reality is especially troublesome in expensive cities (New York, Boston, San Francisco), where low pay makes it nearly impossible for young chefs to find affordable housing.
Obviously, the process of choosing a location is complex. But more and more, it's important to consider cost of living as you determine where to open your doors. (Check out the SBA’s article “Tips for Choosing Your Business Location” for more.)
2. Supply and Demand Are Not Just for Your Products and Prices
According to The Washington Post piece, restaurants are suffering from both a supply and a demand problem in their labor market. On the one hand, fewer young chefs are willing to work long hours for low wages. On the other, new restaurants continue to open, creating a lack of potential hires across the industry.
Similar shortages are happening in other industries, such as IT security. An April 2015 report notes that 35 percent of organizations are unable to fill cyber security positions. Moreover, 53 percent say it can take up to six months to find qualified personnel.
A shallow talent pool requires you to get creative. You might try...
- Recruiting and training college interns.
- Restructuring work environments to include more flextime.
- Offering stipends for professional development.
- Contacting area colleges' career services departments.
- Sharing part-time employees with other businesses.
- Actively seeking referrals through your network.
Each state compiles information about its labor market. You can find the contact information for the department in charge on this Bureau of Labor Statistics page. But remember, a larger labor pool doesn't necessarily mean it's the right market for your business. Investigate the area's consumer base, training opportunities, and government incentives before you set up shop.
3. Student Debt Is a Big Factor in Job Acceptance
Perhaps college is far enough in your rearview mirror that the student debt crisis doesn't strike you as a big problem. However, the 40 million borrowers who owe an average of $29,000 (described in this CNBC report) represent a significant portion of your potential hires.
Why is this your problem? Because those employees need compensation that allows them to make headway on their debt. If you can’t offer that, they'll probably look elsewhere.
Compensation can come in a number of forms. Salary is the most obvious option, but you can also investigate alternatives that sweeten the deal, such as covering transportation, offering daycare stipends, or initiating a bonus program. Additionally, if your business falls in the category of public service, you can create an employer-based loan forgiveness program. You can learn more about that in this toolkit from the Consumer Financial Protection Bureau [PDF].
You can’t keep a labor shortage from happening, but if you play your cards right, you can help make sure your business is prepared for it.