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Hiring and Retention Has Never Been More Difficult

Updated Jan 17, 2024

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After high post-pandemic resignation levels spurred a trend that’s been called The Great Resignation, employers are still seeing mass departures.

In today’s job market, professionals seek employers that offer extensive health and savings benefits, flexible working arrangements, and other perks. Additionally, existing workers are more willing to leave a job for a role that’s more fulfilling and better suits their lifestyle. 

With so many professionals raising their standards, employers are having a hard time recruiting and keeping talented team members. We’ll explore why hiring and retention are so challenging today and share best practices for building a long-term team of engaged workers. 

Hiring and retention are harder than ever

According to SCORE’s Employee Engagement report, small businesses face challenges when hiring employees and experience even more difficulties trying to retain and engage them. Here are some of the report’s findings:

  • 60.7 percent of small business owners rank hiring the right talent as a top challenge.
  • 33 percent cite retaining and motivating employees as a concerning issue.
  • 84.3 percent of small business employers report challenges with hiring new employees. 
  • 45.8 percent report difficulty retaining existing staff. 

Additionally, lack of employee engagement in the workplace contributes to retention challenges: 62 percent of employers say they struggle to keep employees engaged and productive.

Employees are the backbone of most companies — particularly small businesses. Without proper talent, they’ll struggle to stay afloat. Additionally, high turnover can lead to expensive and desperate recruitment and training strategies to help fill the talent gaps.

Did You Know?Did you know

Bad hires can cost your business untold money, time and productivity. According to CareerBuilder, the average cost of a bad hire is more than $18,700.

Why businesses are having a hard time hiring and retaining employees

Here are some typical challenges employers face when trying to hire, engage and retain excellent team members.

  • Workers feel overworked and underpaid. According to the SCORE report, 59.3 percent of small business owners cited wages as the primary cause of disengaged employees. Employees who feel overworked and underpaid won’t put forth their best work. That’s likely why, according to Gallup, 50% of workers are “quiet quitting,” doing only the bare minimum required in their roles. Additionally, if a candidate perceives a job offer as unfairly compensated, they’ll keep looking. 
  • Healthcare benefits are lacking. In addition to the issue of low wages, 39.1 percent of small business employers say healthcare benefits are a driving factor behind hiring and retention woes. Health insurance is a hefty expense for individuals, especially in today’s economy. If a business doesn’t offer health insurance as part of its employee benefits plan, it won’t receive nearly as many job applications from qualified professionals. 
  • Employee burnout affects engagement. SCORE found that 38.5 percent of small business owners deal with unmotivated workers. This stat is on par with increasing rates of employee burnout. Employees can’t perform at their best if they feel overworked, underpaid, and underappreciated. Additionally, workplace stress from micromanagement and a lack of career growth opportunities can cause even the most loyal workers to mentally check out or seek employment elsewhere. 
  • Employers can’t find skilled workers. Another hiring challenge is finding people with the right in-demand career skills. SCORE revealed that 23.4 percent of small business owners struggle with unqualified workers. Whether due to a lack of proper training and experience or a skills gap in the market, this directly impacts many businesses’ bottom lines.
TipTip

Side hustles can affect employee engagement: 29.7 percent of SCORE respondents say they employ workers with other jobs or projects that take away from their primary job.

How your business can recruit and retain candidates

Many of today’s employees are unhappy and detached from their jobs. According to SCORE, disengaged employees impact multiple business areas, including productivity, workload, team morale, and business growth. We consulted with experts who shared their tips for attracting and retaining employees

1. Offer a generous compensation plan.

To attract and retain workers, 59.1 percent of small business owners have increased employee salary ranges, according to the SCORE report. 

“Retaining talent will often go hand in hand with wages,” explained Andrew Fennell, former recruiter and director at StandOut CV. “Companies need to pay fairly for the current market and regularly reflect on if they are still competitive. Employees will follow the money, and this is probably the most simple but common problem with retaining talent.”

However, many small businesses lack the budget to offer competitive salaries. In these cases, other ways to compensate your workers include offering health insurance, employee retirement plans, referral programs and unlimited paid time off (PTO).

2. Provide career development opportunities.

Many small business owners (41.3 percent, according to SCORE) are starting to offer professional development opportunities to employees so they feel more appreciated and engaged in their roles.

“In terms of career development, offering opportunities for training, skill development and clear pathways for advancement can increase employee loyalty,” advised Jacob Hinson, founder of eLocker. “Employees are more likely to stay with a company where they can see a future for themselves and feel they are growing professionally.”

Key TakeawayKey takeaway

Link professional development paths to promotion opportunities to encourage employees to build their careers with your organization.

3. Create flexible work options.

Remote work reached a pinnacle during the pandemic, and its popularity shows no signs of slowing down. According to SCORE, 36.8 percent of small business owners now offer more flexible work policies to appeal to professionals who value the freedom and work-life balance flexible schedules afford. To showcase flexibility as a workplace incentive during recruitment, highlight this perk on your career page or in your job description

“If a company is passionate about work-life balance and prevents overworking, or a business ensures they have the latest tech for employees to use and wants to innovate, these are things potential employees will look for,” Fennell noted. “Make it visible, and it will allow potential recruits to get to grips with your business quickly to see if they are a good fit.” 

4. Build a positive company culture.

Employees deserve to enjoy going to work each day and not hate their jobs. SCORE found that 46.2 percent of small business owners showcase a more attractive company culture to help recruit and retain employees. A positive company culture provides an inclusive environment that eliminates hiring biases and ensures every employee feels like an integral part of the team.

“Remember, for many professionals, nonmonetary benefits can be just as, if not more, important than the paycheck,” Hinson explained. “Engage employees by regularly seeking their input and showing appreciation for their contributions. This makes them feel valued and fosters a sense of ownership and connection to the company.”

TipTip

Become a more diverse and inclusive company to appeal to candidates with broad experience and diversity of thought. You’ll widen the talent pool by attracting people who may not otherwise have applied.

Employment is stabilizing

While many small business owners face hiring and retention issues, only 17.5 percent of small businesses say they have fewer employees than a year ago — down from 26.8 percent in fall 2021. As the economy continues to heal from the impacts of the pandemic, many business owners feel more optimistic about business growth. Be true to your company’s missions and values and show your appreciation for your existing team, and you should find success as an employer. 

Sammi Caramela
Contributing Writer at businessnewsdaily.com
Sammi Caramela has always loved words. When she isn't writing for business.com and Business News Daily, she's writing (and furiously editing) her first novel, reading a YA book with a third cup of coffee, or attending local pop-punk concerts. She is also the content manager for Lightning Media Partners. Check out her short stories in "Night Light: Haunted Tales of Terror," which is sold on Amazon.
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