Changing Search for Employees

1. 1

   Labor markets are currently in transition. They are moving from being very difficult for small employers to locate qualified employees to ones where small employers are encountering fewer problems. Still, 71 percent of small employers who have recently sought employees say that qualified employees are “hard” to find compared to 29 percent who say they are not.

2. 2

   The most frequent response to tight labor markets by small employers is to allow unfilled positions to remain vacant. Two-thirds report that they respond to difficult labor markets, at least in part, by going without needed employees. The smallest employers, i.e., those employing fewer than 10 people, are the most likely to choose this course.

3. 3

   The primary consequence of not being able to fill a job vacancy (83% of the time) is that the small employer must work more hours; the second most frequent consequence (62%) is that other employees must work more hours; about half of the time, small employers who do not (cannot) fill vacant positions limit business output, e.g., shorter business hours, refused jobs.

4. 4

   Sixty-four (64) percent of small employers choose to increase training their labor forces as a response to labor shortages. Training increases are across-the-board (for all employees) rather than focused on a particular type of employee.

5. 5

   One in three (34) small employers try to out-bid other employers when they need people. Most frequently they compete offering higher wages. An offer of more flexible working conditions is the second most common means of attempting to out-bid others.

6. 6

   Easing labor markets first result in greater selection among prospective employees. The most frequent standards raised when labor markets ease involve job skill requirements followed by personal conduct and attitude requirements. The standards raised least frequently are education requirements.

7. 7

   “Employee quits” is the most common form of employee separation from a small business. Two-thirds of new hires among operating small firms are to replace people who have left while one-third are to fill newly created positions.

8. 8

   While more employees leave large firms than small ones, the average number leaving during the first third of the year (14%) was the same for all sizes of small employers. Over two-thirds of firms with fewer than 10 employees saw no one leave in the first third of the year.

9. 9

   By almost a 6 - 1 margin, small employers believe the preferred strategy to deal with their labor forces is to “do all you can to retain employees working for you” in contrast to recognizing “that employee turnover is inevitable and focus on hiring good new people.”
   
   • Nearly half of all small employers report that they are “very satisfied” with their current workforce and 41 percent say they are “generally satisfied.” Those satisfied with their employees outnumber those not satisfied by more than a 9 -1 ratio.

Volume 1, Issue 1, 2001
ISSN 1534-8326

William J. Dennis, Jr.
NFIB Research Foundation

• 15What is the SINGLE BEST solution for the problems created for you by an inadequate supply of qualified employees? Is it:? Top 100
• 17As a general rule, is the better workforce strategy to:? Do you feel that way strongly? Top 100
• 1Which BEST describes the current overall labor situation in your geographic area? Are qualified people:?
• 2How has the labor situation in your area changed since the beginning of the year? Are employees now:?
• 3Do you think the labor market situation in your area will ease, tighten, or stay about the same throughout the remainder of the year?
• 4A(impact of easing labor market) Are you more selective in the people hired?
• 4A1(impact of easing labor market) Where have you raised your selectivity most?
• 4B(impact of easing labor market) Are you waiting longer to fill openings?
• 4C(impact of easing labor market) Is there not as much pressure to meet employee or potential employee demands?
• 4D(impact of easing labor market) Is employee turnover falling?
• 4E(impact of easing labor market) Can you now hire people with skills you previously couldn’t?
• 5Which BEST describes the reason that you have not been looking for people to hire?
• 6How satisfied are you with your current workforce?
• 7How many people have left your business, voluntarily or involuntarily, since the beginning of the year?
• 8How many were asked to leave for disciplinary or non-performance reasons?
• 9How many were laid off due to weaker sales, the end of a job, or other economic factors?
• 10Is this year’s level of employee turnover more, less, or no different than at the same time one year ago?
• 11How many people have you hired since the beginning of the year?
• 12Did the new hire(s) fill an existing vacancy or a newly created position?
• 13Do you expect to have a larger workforce by the end of the year, a smaller one, or one that is the same size as now?
• 14A(impact of tight labor market) Spent more time and effort training your people.
• 14A1Does your increased training focus on:?
• 14B(impact of tight labor market) Gone without needed employees.
• 14B1a(impact of tight labor market) You personally required to work more hours.
• 14B1b(impact of tight labor market) Other employees required to work more hours.
• 14B1c(impact of tight labor market) You forced to limit operating hours, production, the number of jobs you take, etc.
• 14C(impact of tight labor market) Hired temporaries from temporary agencies.
• 14C1(impact of tight labor market) Later hired one or more of these temporaries as a regular employee.
• 14D(impact of tight labor market) Out-bid other potential employers with higher compensation and/or better working conditions.
• 14D1(impact of tight labor market) How did you outbid others? Did you offer:?
• 14E(impact of tight labor market) Spent more time and effort recruiting new employees.
• 14E1(impact of tight labor market) What type of recruiting activity have you increased most?
• 16Why are you experiencing an adequate labor supply in your area when many areas are not? Do you think it is primarily because:?