March 4, 2020 Last updated March 16th, 2020 195 Reads share

5 Ways for SMEs to Meet the Challenges of a Competitive Labor Market

Image Credit: DepositPhotos

For the average SME operating today, recruiting and retaining top talent is a near all-consuming priority. Part of the reason for that is the fact that the labor market has remained tight for several consecutive years. That new reality has produced a situation where more than a quarter of small businesses now report that simply finding skilled employees is their biggest challenge. When you add in the fact that SMEs are often in direct competition for top talent with much larger businesses that can lure candidates with higher salaries and bigger benefits packages – it’s clear that SMEs are fighting an uphill battle.

It’s not a hopeless battle, though. There are some strategies that SMEs can use to make sure their talent pool is as deep and comprehensive as any big business rival. Some of them involve a rethinking of the traditional talent pipeline that SMEs typically rely on. Others involve making more effective use of the human capital already available. Together, they form an approach that will guarantee results in any type of labor market. Here are the five most important of those strategies.

Strengthen Your Employer Brand

One of the key facets of today’s labor market is a growing desire among high-skilled workers to find roles within companies they see as in alignment with their values. To be one of those desirable destinations, it’s important to first work on strengthening your employer brand. That means conducting an inside-out review of your company culture to make sure it’s one that broadcasts an inclusive, positive and welcoming face to job-seekers and the public at large. Existing employees can be valuable allies in the endeavor, as they will be able to identify areas in need of improvement and also function as brand ambassadors. They’ll be walking, talking proof that your SME is an employer of choice.

Recruit From Within

Part of strengthening your employer brand is making sure that existing employees see your SME as a great place to work. As it turns out, there’s a great way to help accomplish that while simultaneously meeting company hiring needs: recruiting from within. Doing this creates several distinct and valuable advantages.

First, existing employees already know what it takes to succeed in the organization. They’ll need no onboarding and require less time to get up to speed in a new role. Second, providing paths for career advancement is one of the keys to an engaged workforce. Third, recruiting from within can be an effective way to fill roles where business or industry-specific skills are required. Those are often the most difficult – and costly – jobs to fill externally, and a major source of hiring headaches.

Create Redundancy Through Knowledge-Sharing

One of the best ways that SMEs can make sure their talent needs are always met is to work hard to break down information silos in their operations. In other words, to adopt a stance that (internally, at least) business knowledge is not proprietary, and to embrace knowledge-sharing organization-wide. One of the main follow-on effects of doing so should be a decrease in job specialization that makes the business more resilient against employee losses.

From a talent perspective, this works to reduce the pressure the business faces to hire mission-critical workers on an accelerated basis. Since all procedural and process knowledge is available within the company, critical work can continue no matter which employees leave. That gives the business more time to find the perfect candidate for each job and reduces the adverse effects of rushed hires. It also provides more time to utilize training as a means of replacing the skills of a departing worker – which is the next strategy we’ll cover here.

Train to Suit

For a long time now, SMEs have set their sights on recruiting workers with college degrees, believing them to possess more well-rounded skill sets. In some cases, however, the old saying, “Jack of all trades, master of none” can apply. There’s an excellent case to be made that recruiting workers with non-traditional educational backgrounds and training them to suit is a much better approach.

Globally, skills training is the norm rather than the exception. In Australia, for example, the nationwide VET system is now focusing on producing the next generation of entrepreneurs and training workers in specific vocations rather than as generalists. SMEs can adopt that same approach by recruiting workers from non-traditional educational backgrounds and then training them in the specific skills the business needs them to have. The result is an employee who’s a much more precise match for a given role than traditional recruitment would ever produce.

Embrace Flexible Working Arrangements

For years, the biggest obstacle SMEs faced when attempting to lure top talent was that another (larger) company might swoop in and offer additional money and perks to land a candidate. Now, SMEs are getting squeezed from the other direction, with the growing gig economy sapping the ranks of workers eager to chart their own course. That new reality has widened the number and types of jobs SMEs struggle to fill, especially among rank-and-file employees.

To stanch the bleeding, and even reverse the trend, SMEs should embrace flexible working arrangements to the greatest extent possible. Around 90% of current gig economy workers say having the ability to shift their work hours is a must-have for any job they accept. That means making that one single change could be enough to tap into a steady supply of workers by winning them back from the gig economy. Besides, top candidates for high-skill positions now expect flexibility at work – so embracing such arrangements is a win at all levels of an organization.

Building a Deep Bench

By using these five strategies to augment or supplant their existing recruiting processes, SMEs can build a deep bench of available talent to draw from whenever the need arises. They can minimize the chance of losing valuable skills when employees leave, have a system in place to promote from within or train new workers for hard-to-fill positions, and can provide a work environment that makes them an attractive destination for top talent and a better alternative for gig economy workers.

Put together, and these approaches should go quite a long way toward alleviating some of the pressure that today’s SMEs face in the struggle to deal with fierce competition in a tight labor market. Plus, they’ll leave the SME well-positioned to retain the best workers even when conditions in the market change. That way, they’ll be ready to face whatever challenges come next, and continue to thrive no matter what those challenges are. For an SME, there can be no better outcome than that.

small medium business – DepositPhotos

Andrej Kovacevic

Andrej Kovacevic

Andrej is an accomplished digital marketing specialist and an avid internet technologist. Throughout his career, Andrej has combined his passion for cutting-edge technology with a keen eye for emerging industry trends to deliver customized marketing solutions to businesses and clients around the globe. He believes that the key to modern marketing excellence is a constant willingness to learn and adapt to the ever-changing digital world.

Read Full Bio