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With workers in short supply right now it may pay to sweeten the deal

·4-min read
<span>Photograph: Justin Lane/EPA</span>
Photograph: Justin Lane/EPA

It’s not news that employers are struggling to fill open positions. There are a lot of different reasons why so many people are staying at home – the lack of childcare options and a continuing fear for health and safety to stimulus payments and expanded federal unemployment benefits. None of this really relevant to small business owners right now. The fact is that, despite a growing economy and increased demand, there’s a serious labor shortage and just about every small business owner I talk to is struggling to find people.

Related: Does Biden’s Pro Act contain a nasty surprise for small businesses? | Gene Marks

So what are these businesses doing to solve this problem?

For starters, many employers around the country are simply increasing worker pay. To compete with the larger chains, independently owned restaurants like Philadelphia’s HipCityVeg are bumping up wages to $15 an hour. A restaurant in Ohio is offering a special “pandemic pay” package for new workers. Pennsylvania convenience store chains Sheetz, Wawa and Rutters have all announced hourly wage increases and “summer stimulus” programs.

The Peninsula Golf and Country Club in Delaware is upping wages by as much as 20% for some workers. “There’s no labor out there,” said Greg Tobias, the principal for Ocean Atlantic Companies, a business group that includes real estate development, and the country club told the New York Times. “It’s not even a question of, are you paying enough money?”

But it’s not just about increasing wages. Many firms, like Cyrus O’Leary’s pubs in Washington state, the Riverside Hotel in downtown Fort Lauderdale, and the Santikos movie theatres in Texas are offering signing bonuses of anywhere from $500 to $1,000 join their companies. Other firms like the Chateau Anna Maria in Holmes Beach, Florida, and amusement park Palace Playland in Old Orchard Beach, Maine, are paying referral fees to their employees for helping them find good worker candidates.

Some businesses are really going to the extreme. For example, the Wall Street Journal reports that firms are dangling Caribbean vacations and Teslas to prospective new workers. Others are giving away swag like slippers, coffee mugs, stress balls, cookies and whiskey. Yes, whiskey!

A McDonald’s franchise in Florida is reportedly offering $50 just to come in for an interview. A sushi restaurant in Tampa is doing the same using the digital currency Dogecoin. The Shrimp Basket in Baldwin county, Alabama, is raffling off an SUV because, as its human resources director admits, “right now we’re seeing that it’s very difficult to get employees to come out and apply, so why don’t we raffle something big and somebody said OK how about a car?” Hey, why not?

States and cities are getting into the action too. West Virginia says it will pay up to $12,000 for workers to relocate there. Topeka, Kansas, in partnership with local employers, is offering people up to $16,000 to relocate there. A non-profit organization in Tulsa, Oklahoma says it will pay $10,000 to remote workers that move to Tulsa and this year sweetened the deal with a $10,000 lump sum payment offer for people to purchase a house there. Services like MakeMyMove have sprouted up to help people find deals and get paid to relocate.

I’m still not done.

Many companies are revisiting their benefits. Tech firm Avanade in New York city is allowing their people to create their own schedules so that employees can “create more sustained patterns”. A popular coffee shop in Las Vegas is also alternating work schedules with a focus on improving their employees’ mental health. Some employers – like the owner of five restaurants in Arizona and online education firm Test Prep Insight – offers help with college tuition and student loans.

The reality is this: free market economies are driven by supply and demand. Right now there is simply a high demand for labor and a low supply. There’s not a lot that small businesses can do to change the situation but ultimately the situation will balance itself. Expanded unemployment benefits will run out in September. Schools will fully reopen. More people will be vaccinated and others will feel better about returning to the workplace. People will get back to work.

But in the meantime, small business owners have to accept the fact that when something is in short supply the cost will go up. That means paying workers more. Maybe temporarily. Maybe longer. It’s basic economics. Some business owners understand this and are stepping up. They’re the ones who will attract the best talent and better position themselves for the future.

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