Author Archives: Alex Kremer

Small Businesses Face Growing Skills Shortage

PHOENIX – May 7, 2015, As the job market improves, many small to mid-size companies are finding it harder to hire employees with the skills they need, according to a survey of 423 executives at mid-tier organizations by TAG Employer Services.

Asked if they agree or disagree with the statement…We face a growing shortage of people with key skills69% of the respondents strongly agree or somewhat agree. Only 8% strongly disagree.

 “The market for talent is highly competitive, and this is particularly the case for mid-size firms” said Joe Johnson, Chief Operating Officer at TAG Employer Services, HRO consultants to small business nationwide. “Key skill sets are in high demand, especially in manufacturing and construction. Employers in these industries need multi-skilled individuals, often with a specific mix of knowledge and competencies.”

Johnson advised that recruiting such people has always been tough for smaller companies, but is now even worse. “Mid-tier organizations can’t afford to burn cycles with a bad hire. The technology to provide more resumes can be daunting, and as a result they often resort to inefficient ‘word of mouth’ campaigns. Skilled labor is out there, but getting the right fit can be a problem.”

Good talent may be hard to find, advised Johnson. “The best source of recruitment is often by tapping your own professional network. Attend local forums with business people and trade associations, and network to source referrals for talent. Social media can also be useful to speed recruitment and find quality candidates. As the saying goes, ‘fish where the fish are.’”

Johnson observed that one of the best things a small business can do for itself is to hire good people. “This would appear to be an obvious statement, however, businesses often lose patience trying to find the right person, and default to hiring the person who was last in the front door.”

The key to success is two-fold, said Johnson. “First, recruiting and hiring require dedication to the task, every component of sourcing, introducing the company, interviewing and getting to an offer is important. Great candidates typically have multiple offers, and hesitation sends poor signals. Second, leverage your brand with your existing employees.  When a candidate is evaluating competing offers, connecting with people doing the work who can speak positively about the work environment goes a lot further than trying to outbid a competitor.”

Why Mid-Market Companies Have a People Problem

It turns out mid-market companies have a lot of the same concerns that smaller companies do.

Chiefly, such companies, typically defined as having revenues between $50 million and $1 billion, are worried about having access to enough qualified employees, according to TAG Employer Services, an Inc. 5000 company that provides administrative services like payroll and health care benefits to mid-tier companies.

TAG surveyed 400 mid-market company executives between early November and early December about top concerns for the coming year. The companies had, on average, 200 employees or fewer.

Although more than three quarters of executives said business growth and profits were their biggest concerns for 2015, 54 percent said employee recruitment and retention were their next largest worry. Cost control and reduction came in third, reported by 50 percent of respondents.

When it comes to employee retention, it’s not offering competitive salaries that’s the most pressing issue. That’s just table stakes, says Joe Johnson, TAG’s chief operating officer. Rather, it’s lack of internal resources for hiring and lack of the proper analytic tools to make the right hires and to assess the proper employee fits.

“When a skilled worker departs it is really felt by mid-market employers,” Joe Johnson, TAG’s chief operating officer said in a press release. “They’ve got to scramble to find a new person with just the right mix of competencies…and they have to plug the gap, deadlines are missed and labor costs jump.”