Capturing top candidates

When the labor market's tight, here's how to attract good employees

Taxes, government regulations and low demand were once the small business owner’s biggest concerns. Now, according to a recent survey conducted by the Los Angeles Times and the University of Southern California Marshall School of Business, lack of skilled labor is the most pressing problem. Claiming a severe shortage, the Information Technology Association of America convinced Congress to increase the number of visas for high-tech foreign workers. But the labor shortage isn’t limited to the technology industry. Across the country, businesses from retailers to restaurants are looking for a few good men and women.

Why the sudden crunch? It’s the economy, stupid! In November, the unemployment rate was 4.4%, the lowest in 25 years, and the good times have caused a drain on workers. Unable to compete with large corporations for good employees, the small entrepreneur suffers. Working with minimal staffing can mean missing deadlines and losing customers.

Overtime is only a temporary solution. Employees can only put in so many hours before burnout sets in. Leasing employees or using a temporary agency is one way to fill vacancies without going head-to-head with large corporations.

“I interview many more people just to fill one position now,” says Stephanie Tyler of AllStaff Temporary Services in Los Angeles. Tyler, who staffs medical, technical, clerical and computer employees, receives calls from businesses who prefer to leave the recruiting and screening to her. Turning leased or temporary workers into permanent employees can also reduce turnover since both parties know what they’re getting up front.

It’s not uncommon for big companies to overhire, only to cut back later. Keep your eyes open for layoffs. Sometimes, there’s no way to avoid hiring the unskilled or undertrained worker. In those cases, internships and apprentice programs with trade schools, colleges and universities can provide low-cost workers and ease training burdens.

Hiring top-notch employees can be expensive. Keeping them can cost even more. In some fields, as soon as you get a good worker, a headhunter tries to steal him or her away. Losing even one employee on a small workforce can be a hardship, but getting into a bidding war is not a good strategy.

Paying too much for labor drives up overhead and can price you out of the market. Use noncash incentives such as stock options and profit-sharing to attract and retain good workers. Employees want jobs that can accommodate childcare and eldercare responsibilities, so job flexibility is a highly prized yet inexpensive perk.

Husband and wife team Meryle Vaughn and Jeff Lasley run Acromedia Systems, a small communications company in Los Angeles. They offer a small company version of a 401(k) plan to employees and commissions to project managers for jobs brought in and completed.

While big companies might pay more, they also lay off more. Daven Baptiste, owner of DesignSkillz Advertising in Los Angeles, has had the same employees since opening four years ago. “Working for others taught me how not to be a boss,” says Baptiste, who says he is generous with vacation, sick and personal time. “I also provide

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