Ep. 144 Labor Pains in Independent Retail: 12 Solutions for Hiring and Retaining Employees

Many shopkeepers are struggling with labor pains right now, whether that means struggling to keep employees or trying to hire new ones. If you’re having trouble with this area, you are not alone! And while there isn’t a one-size-fits-all solution to this issue, I did want to offer some ideas for you. 

I recently listened to a podcast episode from Farnoosh Torabi’s So Money podcast, titled What The Heck is Happening With Jobs? I enjoy Torabi’s podcast and her articles for CNET, such as this recent article about the US job market. While I won’t go into these too much here, Torabi is one of my relatable, go-to sources for financial information.

What Is The Problem?

In a recent survey, 88% of small business owners said they were struggling with retaining employees compared to larger companies in their area. 42% have lost employees to larger companies that are paying more. 

And in response to labor shortages, 76% of businesses report boosting wages to attempt to keep or attract new employees. Many businesses find that “the standard of employee went down and what you’re paying people went up. From an employer’s standpoint, that’s the wrong equation.”

With the number of employees available down and the amount you’re paying higher than ever, store owners have a hard time finding and retaining employees. Profit margins are decreasing. And it’s a real problem for retailers!

What Is Causing The Labor Shortage?

While COVID-19 remains the primary catalyst for the labor shortage, other issues are causing the workforce to shrink. 

According to a recent article from higherstandards.net, some of these factors include:

• Continued fear of contracting COVID-19
• Needing to stay home to watch children due to a shortage of childcare options and/or school closures due to COVID-19
• Unwillingness to deal with increasingly belligerent customers
• Wages being too low
• Increased competition for workers from other businesses
• Older workers retiring early
• Fewer foreign workers
• Reevaluation of job expectations

Not all of the above will necessarily pertain to your business, but some probably affect you.

Potential Solutions to Labor Pains for Independent Retailers

You’ll need to think outside the box to solve this problem for your business. And trust me, I know that retailers are tired of having to come up with creative solutions. But as entrepreneurs, this is part of our journey! We’ll always have to think outside the box, pivot, and gracefully accept change.

These options may not work for every retailer. I just want you to be able to consider them. If something works for you, then, by all means, implement it; if it doesn’t work for you, that’s okay, too.

With that said, here are some potential solutions you could try to solve (or at least lessen) your labor shortage pains. I learned about a few of these solutions came from this article on Recruitee.com.

Hiring Bonus

Would offering a hiring bonus help you get more people to apply and inquire about the position? That way, they can discover how incredible it is to work for you and see and implement your vision and mission for the business.

Your hiring bonus wouldn’t have to be huge, and you could give it after a certain amount of employment. 

Referral Bonus

If you already have fantastic team members, they may have friends or family members who are also interested in working for your business. 

Flexible Hours or a Hybrid Position

It can be frustrating when lots of people want to work from home. But not everyone does! You could offer a hybrid position, with a mix of customer-facing duties in-store and back office work from a laptop at home. 

You could also offer more scheduling flexibility. Because of the pandemic, many people have increased responsibilities at home, so being able to work around school and childcare could make all the difference in bringing more employees on board. 

And sometimes it’s personality, too. In a recent Master Shopkeepers conversation, someone said they realized how efficient and happy they were one day after working in their store alone. They’re definitely more introverted.

For my personality type, I love a mix. I love a bit of customer-facing interaction balanced with working from home. That might apply to the people who are working for you, too!

Hire Part-Timers or Temporary Staff

A lot of workers are unwilling to commit to a lot of hours or a permanent position for various reasons. Hiring more people to work part-time hours, or even consulting a local temp agency for fill-in staff, can help. 

We often focus on training someone and having them stay with us for a long time, so we look for people willing to work a lot of hours. We’re investing a lot of training into our store staff. But again, this is a possible solution, if not a perfect one. 

Outsourcing to Subcontractors or Virtual Assistants

Some virtual assistant or subcontractor positions are really specific and based on a certain set of tasks. For example, virtual assistants can focus on video content, email content, social media content, handling your email inbox, or administrative tasks.

I’ve noticed quite an uptick in Master Shopkeepers members hiring virtual assistants, which is fabulous. We’re now seeing a lot of comments saying, “Oh, my virtual assistant does this,” or “I hired a virtual assistant, and they’ve helped me so much with my inventory management and data entry.” 

Not everything that you hire in your retail store has to be in person.

Revamp Your Hiring Process

What worked in the past may not work now! So what can you do? Who can you reach out to? Where can you advertise that you’re hiring?

This has also come up in Master Shopkeepers recently. Margaret is one of our group members, and she worked in HR for 20+ years. She was kind enough to host a mini masterclass on solutions and ideas for the hiring process. If you’re in Master Shopkeepers, ask what people are doing to find quality candidates in our group (and watch Margaret’s mini masterclass!).

While it used to be that a notice on a local bulletin board or a classified ad in the paper was enough, digital job ads are much more effective these days. Online job boards, LinkedIn, and even Craigslist are good places to start. 

Create More Systems Focused on Efficiency

If you can help your current employees (and yourself!) work more efficiently, you might not need to hire someone else. If you don’t have documented systems or processes, it can be difficult for your employees to make the most of their work hours. 

Analyze Your Store Sales Data and Make Informed Decisions

You’ll want to tread cautiously here, but taking a look at your data can help you decide to shorten your business hours. If you’re not hiring enough employees to cover the number of hours you’re working, or you find yourself working 80 hours a week, it’s time to really take a look at your store data. 

My sister and I looked at our sales data a few years after opening and decided to shorten our store hours from 10-6 to 10-4. We were confident in this decision because we looked at the data! And while it wasn’t labor-related, it did feel good to have the data back us up.

Change How You Measure Success

Measuring success should include a mix of both job-related outcomes AND employee satisfaction. 

It might be time for you to put more effort into rewarding and supporting your team members. What can you do to help retain the employees that you genuinely value and appreciate?

Elevate Your Company Culture

During this year’s Savvy Shopkeeper Retreat, Stacy Schnieber presented on creating a strong company culture. Creating that culture means valuing employees, communicating regularly, and mentoring them to reach their individual or team goals. 

By investing in a culture that promotes employee input, you boost employee engagement. And sometimes, we’re so focused on ourselves and how we want things done that we forget about their input. 

Creating this type of culture may take some time, but I get it. But it’ll create open lines of communication where employees can receive and give feedback freely.

Infuse Diversity Into Your Recruitment

As a Latina woman, I personally value this suggestion. It’s easy to become stale in this area and go to the same places every time we hire. 

What can you do to recruit some diversity in your business? How can you reach people that you haven’t reached in the past?

Improve Your Cash Management

This solution may seem random, but let me explain. A group member recently shared that her issue wasn’t with the labor shortage but with the cost of labor versus her sales. I know this group member really values her team and probably pays them well. I’m also guessing she’s given raises or bonuses to help retain her team members over the past year.

With the cost of goods, materials, production, and shipping increasing—all while you’re trying to keep your employees and spending more on their pay—the cost of labor versus your revenue can become its own problem. Improving your cash management can help solve this issue. 

Group members have access to a masterclass on cash management that includes twelve different areas to look at. One of those points is to build a reserve account for any time you have a cash flow crunch. It isn’t necessarily an emergency fund, but this cushion lets me pay for all of my Q4 product orders in cash, for example. 

Above All Else, Be Creative

I know the ideas I’ve shared here might not work for everyone, and that’s ok! You can find even more ideas in this article from Nextdoor’s Business blog. 

If you are truly struggling with hiring and keeping employees, don’t let frustration keep you from bossing up, thinking creatively, and trying out these ideas. 

Resources

• What The Heck is Happening With Jobs? podcast episode from Farnoosh Torabi’s So Money podcast
• Is The US Job Market Still Strong? Answers to Your Questions About Employment (CNET, August 2022)
• Small Businesses Still Struggle to Find Enough Workers (AP Article, May 2022)
• 10 Effective Ways to Adapt to the Labor Shortage—and Keep Your Business Open (higherstandards.net)
• 6 Ways To Overcome The Labor Shortage And Attract Candidates (Recruitee.com, April 2022)
• 12 Ways To Improve Your Diversity Recruiting Strategy (Recruitee.com)
• How to Overcome the Small Business Labor Shortage (Nextdoor Business)
• Episode 56: Systems & Processes
• Group Membership with Savvy Shopkeeper

Timestamps

• [04:03] What is The Problem?
• [05:25] What is Causing The Labor Shortage?
• [06:44] Potential Solutions to Labor Pains For Independent Retailers
• [22:14] Above All Else, Be Creative