Can't Find Good Staff? Try This...

Almost every business is struggling to find staff at the moment. However there are strategies you can consider which have worked really well for some of my clients.
 

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What is The Business Coach?

This podcast is for small to medium business owners. You've got a lot to gain, a lot to lose, and business is tough; there's a lot at stake. Business acumen is what every business owner needs, it will make a profound difference to your business.

This podcast will cover marketing, positioning, branding, lead generation, selling, negotiating, customer service, managing staff, managing finances and accounts and much more.

https://www.businessveteran.com.au/
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Are you struggling to find good employees? Here are some solutions.

Almost everybody is struggling to find good employees across every sector and industry. It is such a dire problem in some businesses that their very survival is threatened. However for the resourceful business owner, there are always things you can do to get a jump on your competitors - your competitors for employees that is.

Now extraordinary times require extraordinary solutions. A couple of my clients have struggled with this problem and we've come up with some very different but workable solutions.

The first one Is to think a little differently about how you get your work done. Now it's the more skilled an experienced people who are especially hard to find, the less skilled and experienced are somewhat easier to find. So in one business, we took on three inexperienced but keen employees, and reassigned one experienced tradesman to train and supervise them. The tradesman was keen to do this as he was not as young as he used to be and was starting to find the work physically demanding, as well as really enjoyed the opportunity to develop others and impart his wisdom and experience.

The first thing you're going to wonder is how did they pay for this.

To make it work financially, we looked at how much revenue one experienced tradesman could generate, and compared that to the revenue generated by a team of four, but producing the output of three, which is what we estimated would be the production capacity of the team. It turned out that the resulting gross profit after wages was considerably higher. Although not as high as 4 experienced tradesmen, it was still way higher than 1 experienced tradesman, even given the additional wages bill.

The reason why this works is because apart from wages, most of the other expenses (ie overheads) of the business stay the same. So that gross profit (after the additional wages) becomes pure profit.

For a solution like this to work you, you need a firm grip on understanding the revenue and gross profit generated by each production employee. This is relatively easy to do with a spreadsheet model. The other essential condition, of course, is that you have plenty of work on to fill the expanded capacity. In the case of this business, they had a queue of six months' work waiting to be completed, so not a problem.

I'm finding that most businesses in the past couple of years have plenty of work on but are struggling to find staff to take advantage of it. In other years and economic conditions, it's been the other way around, and if you've been in business long enough, you will have seen both extremes.

So to the second case study. This business had been running ad after ad on platforms like seek and indeed and simply not getting anyone suitable. They even tried poaching employees from other organizations without result. This was causing serious problems for the business. The culture in the workshop was awful too with at least one employee walking around grumbling to whomever would listen. It was difficult to hold him to account due to the risk of him leaving, which would have put the business into losses.

At this point I realised we had probably come up against an economic principle called the law of supply and demand. When the supply is low and demand high, the price goes up. This is exactly what is happening in the labour market right now. There was nothing else to do but increase the price. In this case, the wage being offered.

Now owners were adamant that the going rate for that particular trade in that location was $37 per hour. They believed it was appropriate for the skills and experience required to do the job. But my sense was that the market was proving otherwise.

I asked them "what would happen if we offered $45 per hour?". They said plenty of people would jump at it, but they believed that it was way over the required rate, and there was no way they could afford it, especially considering that they would need to raise the rates of everyone else in the workshop.

I pointed out, that the fact that they had no applicants, was fairly convincing proof that the rate was too low.

Just as in the first example, we did the numbers. They had plenty of work on, and including giving everyone a pay rise, I proved to them that it would be well worth while taking on an additional two employees.

This was a nerve wracking decision for the owners of a business with marginal profitability - taking on additional employees and giving everyone a pay rise.

The next issues was to make sure this better offer would be seen by plenty of people. There's not point having a great offer if no-one sees it. It would be like having a great product but no marketing.

As luck would have it, their premises was on a major highway up the east coast, so a professional sign was made up offering $45 per hour for a qualified tradesman, and placed on the fence. Applications flooded in, and in short time, two very skilled, and even more importantly, positive, people were successfully employed. All the other workshop staff received some level of pay rise depending on whether they had a qualification, level of experience and so on. Everyone was happy and the vibe in the workshop was electric.

Within a month or so, the new staff were up to speed and production has never been higher.

Just like in the first example, this was only going to work if there was plenty of work on to fill the capacity, and there was, in the case of this business.

So there you have it - two solutions which have worked, for you to consider. Yes they increase costs however the prize is profit, and if you can do more work for those increased costs, there's greatly increased profits to be had - that's the magic of business.

Also, there's probably never been a better time to increase prices (what you charge your customers). Even more than revenue, a price increase goes straight to your bottom line without even doing more work.

If you have any questions, I'm always happy to answer them, make contact, my details are in the podcast notes.

I'm Mark Jackson.