Pitching a business to investors

Adapting to the changing dynamic between talent and employer in 2021

Due to a few different events over the last few years, it’s getting harder and harder to secure good talent. But talent is the heart and soul of any business. If you intend to survive, let alone grow your business into one worth buying down the road, you’ll need to figure out how to navigate this challenge.

The first step is understanding exactly what is going on (keep in mind that the list below is not necessarily exhaustive).

Talent has more leverage than in years past

In the current climate, we see several trends that give the worker more leverage:

1. Low incentive to work

2. High incentive to not work

3. There are too many jobs available

4. New perks

5. New jobs in new fields

6. Wider pool of employers within industries

Let’s start with the labor shortage of 2020-21, because that’s what has really highlighted this shift for many businesses (particularly smaller businesses who pay low wages, like grocery stores and restaurants).

Fear of catching COVID means there’s a strong incentive to not go to work. Unemployment plus stimulus money means there’s no need to go to work.

For those who are interested in working, there are plenty of options. Everybody needs help right now. Which means that workers can demand higher wages, and this is reasonable. After all, the cost of goods has increased in many areas.

Speaking of options, the pool of employers has been widening for years, at least in some industries. Due to the internet, people can now find work anywhere in the world. Remote work has been on the rise for years. Thanks to the year of Covid, it’s bigger than ever. For many, it’s now a requirement. The last year and half has proved that remote working works, at least in some capacity. Don’t expect this trend to go away.

This is something to think about when you’re competing for talent. Consider what other employers offer besides money, particularly in emerging sectors like tech.

There are new fields to go into, these days. There are new jobs out there don’t involve all of the things that so many find distasteful about their job: dirty conditions, physical labor, workplace hazards, being on your feet all day. And some emerging jobs have a low barrier to entry. You don’t necessarily need a50-100K college education.

How to compete for talent

1. Consider everything you have to offer, beyond financial compensation

2. Sweeten the deal as much as you can by raising compensation

3. Be more creative with your compensation wherever you can

4. Think about the intangibles, like company culture

5. Include room to grow as part of your offering

You might not be able to offer everything an employee wants, but you might be able to offer enough of a few certain things. The option to do certain tasks remotely for hours or even just one day a week can go a long ways, especially for workers with young kids or long commutes. You might even be putting money back in their pocket by letting them work from home.

You may think that you simply can’t offer many of the thing workers are after nowadays, but if you’re resourceful enough you can probably figure out ways to offer it in some capacity. Another example is giving workers a little more flexibility over their hours where it’s manageable. Sure, you need them there eight hours a day. Sure, you need them there between 10am and 2pm. But does it really matter whether they start at 7am or 9am?

Ask yourself if you really can increase compensation

Of course, it very well may be time to increase wages. It’s no secret that the cost of operating your business is passed on to the customer. With that in mind, you may have to consider raising your prices. Now is a time to be paying attention to what your competitors are doing with their compensation and with their prices. The cost of doing business is rising across the board. Its not just payroll; there’s the rising cost of goods to consider, too.

We’re not suggesting you raise your prices as a solution to all your problems, but we are suggesting that you keep that option on the table.

Be creative with compensation

Another way to entice workers is to be more creative with your compensation. Base wages and base salary don’t leave you much wiggle room to put more money in somebody’s pocket. Bonus and commission do, however. They also incentivize performance. As somebody brings in more money for the company, you can share that money with them. This is great for competent workers who are confident in the value they provide an organization.

Set your company apart with workplace culture

Make sure you’re providing a great place to work, as well. Talents wants to feel comfortable, valued, respected and listened to, and note very work place provides that.

Offer room to grow

Finally, one thing that can outweigh more money now is even more money in the future. Workers, especially talented ones, want to secure a future for themselves. Let candidates know what opportunities are available to them, and make sure you’re putting the appropriate amount of time and thought into creating these opportunities.

In conclusion

Perhaps the best way to find out exactly what you can offer workers is to ask them for ideas. You already have workers in your company, and you certainly know many more in your personal life. Beyond that, there are other ways to capture data and ideas. You could include data capture tools like survey questions as part of your recruiting and interviewing process.

Another reason this is important is because retaining your current staff is just as important as finding new talent. Reaching out to your team to get feedback will get you important insights, in addition to communicating to them that they are valued. Remember, the harder it gets to recruit, the more it means your current employees have other options.

Secure your future

Putting together an effective team is a major part of building a valuable company, whether you plan to sell soon or not. For more insight on the virtues of building an effective team, you can see this article.

For help in building or selling your company, you can contact Free Vector Advisors. Legal and business counsel is available for businesses of all types and sizes. Flexible payment terms can be arranged to suit your needs. To speak to one of our experts, fill out a contact form here.

 

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