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Tips on how to adjust to “sellers’ market”

BY: MICHAEL STERN October 11, 2006


If there’s something that CEOs, small business and Alberta contractors all agree on, it’s Canada’s growing shortage of good help.

While most of the country is not in the same boat as Alberta – where doughnut shops are offering bonuses just to get staff to come back on Monday – the difficulty of finding and keeping good people is impacting every business, big and small.

In my experience, part of the problem is that many employers have not adjusted to the “seller’s market” that is today’s job scene. To get the right people they need when supply is tight, employers have to learn to be more flexible, creative and investment-minded.

How do you do that? The following tips are designed to help mid-sized and bigger businesses hire managers and executives in a time of labour shortages, but they may also help any organization struggling to recruit and retain talented, motivated people.

1. Define what you’re setting out to do. Are you looking to hire any warm body to fill vacancies temporarily, or are you looking for top people who will stay with you for the long term? Once you decide, make sure your tactics match your objectives.

(Don't forget Option 3: finding new ways to keep current employees satisfied – satisfied enough that they don’t leave and create vacancies. In a labour shortage, the best strategy may be to reduce employee turnover, so you don't go to the market so often.)

2. It’s not always about the money. If it were, everyone would have gone to Saudi Arabia in the 1990s. Or to Fort McMurray last summer. I remember one HR executive for a fast-food company telling me that one of pillars of the company’s retention strategy is the employee baseball league. The drawing power of friendly, competitive baseball with colleagues—company supported off-hours fun -- can be worth gold when weighed against offers from other employers.

Think about what makes your people value their jobs, then beef that up to discourage them from jumping ship.

3. Offer (or upgrade) incentives for employees to refer or recommend friends, colleagues and acquaintances. Searching for good people costs you time and money; why not redirect some of those dollars to soliciting referrals that will help you fill your vacancies more quickly? This will also make your company a more fun (and lucrative) place to work, thereby reducing turnover.

4. When trying to attract new blood, think like a candidate. The best of them know they're a hot commodity, and an offer that they might have leapt at 18 months ago may not be worth considering today.

Use salary surveys and other local-market measures to ensure you're paying competitively. Ask yourself what non-monetary incentives (location, training and development, growth opportunities, interesting projects to work on) your best candidates would be looking for.

If you have to pay more, don't think ”cost”, think “value”. Your investment today in making sure you get the right candidate pales before the price of making the wrong decision – and then having to start the recruitment process all over again.

5. Get job-seekers’ attention. Since almost everyone is hiring today, you have to stand out. Upgrade your recruitment ads to make them more relevant, effective and differentiated. Find new locations and new media (podcasts, anyone?) for communicating more directly, and earlier, with candidates and prospects.

6. Go where the candidates are. In the late 1990s, one U.S. software developer sent recruiters to rock concerts, knowing that young concert-goers fit the demographics of its entry-level employees.

Where are your best prospective employees now? What do they do, where do they go, what do they read? You have to fish where the fish are.

7. If budgets are tight when wooing managers and executives, appeal to their long-term interests. Structure their compensation packages so they qualify for bonuses after they have stayed a specified time. If they stay at least two years, for instance, they might qualify for a $10,000 bonus.

This back-end loading strategy could help you attract people who have been hoping for a higher salary than you can currently justify. Remind them that no boom lasts forever, so why not lock-in the benefits now?

8. Get creative. Maybe you could enter all employees with more than five years’ service into a draw for a free vacation (or an extra one week’s vacation: cut your cloth to match your resources).
Big gestures can be powerful, and may even be cheaper than managing a load of smaller incentives. And the buzz of anticipation can be a tremendous motivator.

The key is to stay in touch with your employees and learn what incentives interest them most. The last thing you want is to have your decision-makers sitting in a boardroom guessing what will work.

A shortage of labour is too important to be left to management alone.