🔒How to: Find talent in a tight labor market

Over the past year, small business owners have expressed record confidence in their local economies and as a result, many are attempting to expand their business or increase hiring. This growth has been tempered by one of the tightest labor markets in half a century.

The situation is acute in Maine, where the unemployment rate was 3.5% in January, compared to 4.0% for the U.S. Our demographics are also trending in the wrong direction: we are the oldest state in the nation and getting older; more Mainers are retiring than are entering the workforce; our death rate surpasses our birth rate; we have negative net migration; and the pool of high school graduates is shrinking.

It is unlikely that we will see the labor market loosen any time soon. Therefore, entrepreneurs must look for ways to stand out from the crowd when competing for talent.

According to our most recent Bank of America Small Business Owner Report, 67% of business owners plan to expand in 2019, and 27% are looking to hire. At the same time, 58% say it is difficult to find qualified talent, with many saying their inability to find new employees is having a direct impact on business growth.

Our report also found businesses owners have embraced the following tactics, to attract top talent amid a tight labor market:

• Shift to a more flexible culture: Small businesses are often heralded for having less bureaucracy and offering more creative freedom versus large corporations. Business owners should embrace that reputation and can even look to expand further by offering a more flexible workplace culture. This can mean anything from offering the option for employees to work remotely or set their own hours to switching to casual dress everyday rather than just on Fridays and holidays. In fact, our study found 57% of entrepreneurs already say they are offering flexible hours to attract talent, and 33% are offering flexible work locations.

• Use social media more actively: Posting updates and photos on social channels is also a good way to market yourself, not only to potential customers, but to prospective employees. Through platforms like Facebook, Instagram, LinkedIn and Twitter, you can share content that highlights your company's culture and allows prospective employees to get a sense of what working with your company might be like.

• Develop apprenticeships: Traditionally, apprenticeships are associated with the trades, but other industries and occupations are increasingly looking to apprenticeships to attract talent. In fact, thousands of occupations qualify for the Maine Apprenticeship Program offered by the Maine Department of Labor. Dozens of Maine employers have utilized this program to apprentice occupations ranging from real estate appraisers, nurses and chefs to service dog trainers, funeral directors, and pre-school teachers. The employer is assured of obtaining a qualified employee who in turn increases their earning potential and gets a career, not just a job.

• Offer higher salaries: At the end of the day, we all know that compensation — be it salary, benefits, or a combination of the two — is often the determining factor in choosing a new job. It is no surprise that 17% of business owners say they are offering higher salaries to attract prospective employees. When the job market is this tight, businesses need to be able to compete on salary to attract and retain workers.

Small business owners who want to meet their goals this year will need strong teams to support them. Successful entrepreneurs need a holistic and competitive approach to hiring, balancing culture, social presence as well as salary. They need to stand out in the crowded labor market.

Ray Quattrucci, a small business banker, is Maine market vice president at Bank of America.