How to Combat a Tighter Labor Market in 2023

ByContent Manager
HR outsourcing

It’s no secret that today’s labor market is tight. Evidence can be seen across the nation as many employers struggle to fill positions, and some have even been forced to scale back hours or operations due to insufficient labor. Over three-quarters of employers cite having a harder time filling positions now than in the past.

Despite the dire labor market, there are several ways that employers can reduce the challenges and secure the laborers they need to keep business operating smoothly. Successful strategies include:

  • Outsourcing jobs or tasks: Recent years have experienced an explosion in the number of freelancers and outsourcing firms that provide employers with a steady stream of qualified individuals to complete specific tasks. If you can’t find someone to hire, it makes sense that outsourcing could be a viable option. For instance, many companies have outsourced HR functions with great success. Instead of keeping an HR team in-house, these companies often find they can provide better HR services at a lower cost by using HR outsourcing with third-party HR providers. This option can be very attractive during a tight labor market since it relieves the company of hiring, paying payroll taxes, additional cost for benefits, and onboarding, and it makes more financial sense than employing an HR individual or an HR team full-time.
  • Streamline your hiring process: Another way to stay ahead of the game in a tight labor market is to create better job posts, increase transparency, provide clear expectations and timelines, and hire quickly. Streamlining your hiring process can attract better candidates and speed up your hiring. Moving quickly means you can hire attractive candidates before your competition has a chance even to interview them. HR outsourcing can be essential in making your hiring process as adaptable and streamlined as possible.
  • Increase your pay or benefits: Whether it’s a tight labor market or not, you can often attract candidates better by increasing your offerings. This goal is often accomplished by increasing the salary or wage, offering better benefits, or providing a sign-on bonus or hiring incentive. Providing employees with greater salaries  and/or a more competitive benefits package will cost your company more money. It’s ultimately more effective at attracting and hiring more qualified candidates, especially in a tight labor market.
  • Be more flexible: It’s no surprise that employees prioritize flexibility and a work-life balance. These two benefits are often deemed more important than compensation. If you can’t offer greater pay or benefits, it makes sense to consider offering greater flexibility. In many instances, a willingness to be flexible can leave you with more qualified and happier employees. In a tight labor market, this benefit is a huge commodity. While flexibility can’t be extended to all positions, it’s certainly a good idea to consider it for positions that can be flexible. It can boost your odds of filling a vacancy and finding a highly qualified candidate for the position. An HR outsourcing option can assist you with designing a comprehensive, strategic organizational structure, consisting of departments and levels of positions within the departments. This structure can be designed with a fair, equitable, and non-discriminatory approach to meet your business needs, which will include those positions that can have the flexibility the employees and candidates desire.
  • Offer employee development paths: Another key strategy most modern employees desire is greater career development. They want a path to achieving their personal career goals, not just filling a role within your company indefinitely. However, this benefit can be a win-win for the employee and the employer. In many cases, when you invest in the development of your team, they will show greater loyalty to your company and engagement in their position. This means you have a great chance of keeping them – and their new-found knowledge and skills – as employees. As all business owners and managers know, retention is equally important as hiring, and an HR outsourcing option can help you maintain retention and improve hiring.
  • Consider your culture: Workplace culture is another intangible asset that is highly important to existing and prospective employees. After all, everyone wants to work at a place with a positive and exciting culture. It is often the reason that makes an employee happy to be in their current role. If you have difficulty filling vacant positions or have a high turnover rate, it’s worth looking into your current culture and determining ways to improve it. Increasing trust and collaboration can often make your employees happier and more satisfied in their roles. It’s also a way to showcase your company as an “employer of choice” and a desirable place for job candidates.

There is no denying that the current labor market is tighter than it’s been in many years. Even if you aren’t seeing this problem at your current company, the evidence that many employers find hiring challenging is everywhere. It’s forcing many employers to think creatively about making their company more appealing to current and potential employees. It’s also opening the door for greater levels of HR outsourcing than we’ve seen in the past. HR outsourcing is a great option to shrink your employee needs without sacrificing services. To learn more about HR outsourcing, contact CA HR Services today!

CA HR Services specializes in working with small and medium-sized companies to help develop legal, efficient, and appropriate H.R. processes and procedures that meet state and federal labor law requirements.