Just about everyone in Arizona has noticed more “Help Wanted” signs over the past few years — and more articles about labor shortages. We’re certainly not alone. Nationwide, workforce participation was down by 1.5%, or nearly 4 million workers, at year-end 2021 compared to February 2020, the U.S. Bureau of Labor Statistics has reported.
Although Arizona ranked #8 among states least impacted by labor shortages, that doesn’t mean Arizona businesses have it easy. What’s more, employment challenges may linger for several years.
To steer their organizations through any labor climate, employers will do well to have long-range strategies in place. These approaches can help bring success, even amid a labor shortage:
1. Raise pay to keep up with the competition. Money talks, and it’s what plenty of workers are pushing for these days. Offering higher pay than the competition — or at least staying in step — tells workers they matter to you. If you need to raise prices to raise compensation, some experts recommend being upfront with customers, who may be more understanding than you expect.
2. Assess less-tangible benefits. According to The Wall Street Journal, workers quit at record rates through the “Great Resignation” in the early 2020s. Asking employees what they want and need can offer one way to hang onto valued employees. If your organization can accommodate hybrid or remote work, you might offer that option — but remember that many workers still long to work on-site. Your staff may wish for a well-equipped break room, flex time to help manage child care needs, or days off for birthdays and serving the community.
3. Look into financial efficiencies. Automating deposits, utilizing sweep accounts and streamlining payroll and accounts payable processes can provide some financial breathing room. Your banker can assess your treasury management strategies and recommend new ways to increase efficiencies and strengthen cash flow. New bookkeeping solutions might even free up FTEs’ time for other needs, giving you increased flexibility to manage labor shortages. With expertise in your industry, your banker may also have additional insights — from ideas about equipment leasing to automation.
4. Consider short-term investments with long-term returns. Beginning in 2020, restaurant drive-thrus soared in popularity. In response, as Restaurant Business has reported, chains like Chipotle and Dunkin’ have found that a $70,000 investment to add a drive-thru can raise profits by $300,000 per year, with minimal added staffing needs. Other restaurants are building “ghost kitchens” (to serve delivery orders only), while retailers have converted shops to micro-fulfillment centers or dark stores. Not only do these locations mean faster service for consumers, but they may also appeal to employees who prefer to work without much face-to-face customer contact. Your banker can help evaluate your opportunities and financing options to build more profit into your business.
5. Recruit continuously to find suitable candidates. Relationships may be your secret weapon when it comes to recruiting. Many successful recruiting teams reach out proactively to great candidates 365 days a year. This strategy, known as passive recruiting, can keep you in the sights of someone who isn’t actively looking for a job. When the perfect fit appears, you’ll be poised to make an offer and get them on board.
For insights into how your banker can assist in building flexibility in the face of the labor shortage, contact your Alliance Bank of Arizona relationship manager, or learn more about our bank’s approach to working with the community management industry.