By Phil Watlington

Much has been written about the coming employee shortage-well, it's here! Both large and small businesses are feeling the employee shortage squeeze.

The bad news is that employee shortages are predicted to get worse before they get better. Studies all point to the tightest labor market in the past 30 years. In fact, 80 percent of businesses surveyed by Robert Half indicated that it is more difficult to find qualified candidates for job openings today than a year ago.

This shortage is of particular concern to owners of retail businesses. The front line employees are the retailer's most valuable asset because as they are the driving force behind consumer spending. Without good employees, consumers won't spend at your business.
 
Finding Good Employees
A third generation owner of a small Kansas City restaurant chain remarked recently, "When one of my employees who has been with us for a long time quits or retires, I really can't replace them. No one wants to do this work. I have to find standard ways of doing everything so that training time is minimized. Turnover is very high. I spend a large portion of each day nurturing and training employees. I may be the last generation to operate our family's business."

A small retailer remarked that it is almost impossible to keep employees who can maintain a level of customer service required for the success of her business.

The bottom line is that nearly all small business owners-especially those in retail, food service, technology and engineering-cite finding suitable employees and turnover as major challenges in their businesses.

Retail recruiting is different than most recruiting because the potential prospects are numerous but have varied backgrounds. Your suppliers and customers can be your best recruiters. Reward them well for identifying prospects and for actual referrals

Another thing to consider, if it is possible for you, is to provide online applications. Surveys of potential retail employees have shown that they are more likely to apply for a job with a company that offers online applications. The top reasons given for preferring to apply online are that they can apply at a time that fits their schedule; it is faster; and it leads them to believe they are a more innovative company.

Here's What to Do
Small business owners have a variety of things they can do to attract, or retain, employees.

• Focus on employee development programs, such as on-site and off-site educational opportunities, mentoring sessions, counseling, on-line training and time off for learning experiences and trips. Programs that help employees gain personal and professional skills are the most effective methods for retaining employees (yes, even ahead of money).
• Create an environment of inclusion and recognition, where employees are included in as many aspects of running the business as possible; and, provide individual recognition for their contributions to the success of the business. As with personal and career development, inclusion and recognition for accomplishments have been proven to be more effective than money when it comes to employee satisfaction and retention. 
• Provide flexibility-when possible-with regard to work schedules that allow time for child care, elder care, personal care, community service, working from home and time off for special family events. Nearly all businesses that introduce "flexible work hours" report a significant reduction in employee turnover.
• Recognize and curb employee burnout. Due to size, small businesses have an advantage in detecting and mitigating employee burnout.
• To the extent possible, provide employees with benefits such as health care, educational assistance, stock ownership and tax-deferred 401(k) retirement plans. Surveys continue to show that for many employees, the availability of health care benefits is a main reason for working and staying with an employer.
• Offer product discounts to employees and their family members. And, allow employees to extend a limited number of discounts to their friends and acquaintances. This can be a benefit that helps both the employee and the business by providing additional sales while, at the same time, promoting the company.
• Retain and hire older workers. Educated and experienced older workers can fill many of the critical shortages that exist today by working full time, part time, or through job sharing arrangements.
  

The coming employee shortage has arrived! By establishing flexible, desirable and rewarding "places" to work, small businesses can continue to successfully compete for talented employees.

For a more detailed report on employees shortages and ways to find and keep employees, visit our Web site.
 
Phil Watlington teaches finance, managerial accounting and strategic planning through the University of Phoenix and is a senior manager at the General Electric Company. He is the author of The World Is At Your Door. You can reach him at (913) 485-2577 or