In 2017 I saw a number of established small and medium enterprises (SMEs) affected by a crisis challenging their very existence.  The ability to hire the right staff.  The ability to find and keep good staff has always been a challenge but the skills shortage, now worse than ever, is threatening their survival. 

Although I’d like government to have more relaxed rules for SMEs around hiring overseas people, last years immigration criteria changes have meant the opposite.  So this article firstly defines the problem then provides practicable and affordable solutions.

As an outsourced recruiter I’m the recruitment arm for small and medium enterprises so have a holistic view of how the skills shortage is impacting SMEs.  I see more and more SMEs stymied by not being able to get staff.  The lack of available people combined with SMEs reduced ability to be noticed by potential employees runs a real risk of paralysing some businesses.  Last year I had several business owners tell me that if our team couldn’t find a person with particular skills (skills that weren’t on the skills shortage list) then they would have to shut up shop.  If you’re reading this article you’ve likely experienced the shortage but here's some firm statistics if you'd like them.

In 2017 the largest increase in job ads was for unskilled and semi-skilled labour (reported in September 2017 by HRD).  Luckily some of these roles such as CNC Operators are now on the skills shortage list.  What catches SMEs out is a massive shortage of sales people, a remaining effect from the GFC.  Many people left this profession and haven’t returned, but this isn’t on the skills shortage list.

The reason the skills shortage is so impactful on SMEs is that they generally aren’t well known to potential employees, in comparison to corporates.  Most SMEs lack employment brand and recruiting expertise.  They also don’t have funds for agencies, therefore many try to DIY. 

The current 4.6% unemployment rate has meant a changed hiring landscape.  Due to skills shortages and low unemployment we have moved from the old fashioned “Advertise and Assess” model of hiring to “Find and Engage” (well-articulated in a recent article by Adele Chua of HRM).  That raises real concerns for SMEs as they do not have the time, resources or experience to hunt people down, approach them and convince them to come aboard. While in the past they’ve been able to get away with DIY due to good ad response, they can now be left high and dry.

So, in a nutshell - the main challenges for SMEs are lack of visibility and lack of budget or resources to improve this. Yes, SMEs should be training current staff and making sure valued staff are on or above current market rates, and have conditions they value.  But if the horse has bolted and you must hire, or you’d like to grow the company, here are some recommendations that may help…

Recommendations:

  • Ask your existing employees for referrals before you advertise, specify people they would recommend, not just people they know
  • Market your opportunity from the candidates’ point of view, this means not saying ‘We are looking for’, or ‘you must have…’.  Instead try ‘Thrive working in…’ or Enjoy a role as…’.  In this market it truly isn’t about you
  • Find Facebook groups that relate to the interests of the people you seek and post your ad there.  Consider ‘boosting’ your post
  • Are there any special interest groups related to the role you are employing for, organisations or associations?  If so advertise on their sites or in those publications
  • Use video to provide further information.  Not corporate videos that are written for potential clients as an audience but potential employees as the audience.  Feature your own employees to add a personal touch and explain what they like about the company.
  • Use an outsourced recruiter who’s innovative and digital and social media savvy and can put together a plan for putting your opportunity in front of the right candidates
  • Be open minded, you may not be able to hire a Kiwi, think about the experience a new Immigrant may bring that a Kiwi may not have had exposure to
  • Remove age, cultural and other biases!  Hard to do I know but now’s not the time to be close-minded if your business is to survive
  • Consider new grads, in many cases they are able to come up to speed quickly
  • Consider supporting an immigrant’s work visa request by completing the dreaded ‘Employer Supplementary From’ to support the job offer.  You will of course have to advertise and register the role with Work and Income and track results to provide proof of difficulty
  • Put a careers page on your website that is tailored to your ideal audience, i.e potential employees.  Showcase current employees and their achievements.  Also have a Facebook page for your company where you can publicise opportunities
  • Embrace ‘Search’ methodologies to headhunt the person you want, if it’s a sought after skill an ad is unlikely to cut it.
  • Depending on the job mind map your current competitors, known people in the industry, identify those you would be interested in.  Find someone within the company who knows them and can approach them or alternatively outsource this to your outsourced recruitment partner
  • Maintain a list of anyone that shows interest and if the timing isn’t right, send them employee newsletters and keep them informed and engaged, they might be interested at a future time

On the up side - 97% of all businesses in NZ have less than 20 staff, and as 28% of our GDP is estimated to be produced by these enterprises, there is no argument that small businesses are critical to NZ’s future.  In Feb 2016 29% of all employees worked for companies with less than 20 staff, so there are a reasonable number of people who prefer to work for smaller businesses. 

But with Immigration requirements tightening, hiring will get worse before it gets better, so I suggest SMEs engage expertise and help to give themselves the best possible chance of competing for top talent.  Besides my company Talent Seed, there are many outsourced options that are not agencies and don’t come with the corresponding hefty price tag.