Struggling to attract talent
Small businesses have a big challenge to find the right workers,
When Jean Blacklock was looking to hire a head baker back in 2010 for her new cupcake shop, Prairie Girl Bakery, she lucked out.
She quickly found pastry chef Andrea Ascione, who happened to be in a transition period of her career, and the idea of working with a startup appealed to her, said Ms. Blacklock, Prairie Girl’s founder and president.
But just last year, even after Prairie Girl bakery had become a recognizable name and had branched out to two downtown Toronto locations, it took much longer to find an assistant head baker. “It took us a couple of months to find the right person,” she said.
Even amid a slowdown in hiring across Canada, small businesses continue to face difficulties recruiting and keeping the best employees.
It’s a challenge for smaller enterprises to compete with the big corporations on salary, benefits and even the cachet of working for a recognizable name.
Vacancies for small companies remain an issue even as the number of new jobs coming into the market slows, with just 11,900 positions added in September.
Smaller businesses have the highest average unfilled job rates, data compiled by the Canadian Federation of Independent Businesses shows. In the first three months of this year, businesses with fewer than 19 employees had vacancy rates averaging 4.2%, compared with 1.6% for companies with 500 or more employees.
What’s more, a vacancy at a smaller business represents a sizeable share of their total workforce, the CFIB said in the May report, and has a comparatively larger impact on the company.
“Ultimately, there are more roles, there’s more business ongoing than there are talented people to do it in a lot of cases, especially at the higher end,” said Stephen McCrum, vice- president of Western Canada for staffing company Randstad.
In areas such as engineering, where there haven’t been enough graduates in recent years to keep up with demand, it is increasingly competitive to attract and retain the best talent, he said.
It’s an issue particularly for new ventures that don’t have the name recognition, perceived stability, or the deep pockets of a multinational corporation.
Anatoliy Melnichuk, cofounder of deal-buying website Buytopia, said when the startup first began hiring three years ago for key roles in operations and sales, it was a difficult task.
“It was much tougher, especially when we were just five, six people, because the model wasn’t proven out,” he said. “You have a lot of that top talent that would make $80,000 to $100,000 working somewhere else. They worry about whether or not they’ll have a job, that’s always a concern.”
Some small enterprises say they come up empty-handed. Roughly 11% of small business owners said their search never produced the right candidate, and 28% said job openings were left unfilled for up to three months, according to an American Express survey on employee attraction and retention from the fourth quarter of 2011, the most recent data available.
Now that Buytopia is one of the largest e-commerce companies in Canada, with more than 50 employees, recruitment is less of an uphill battle, Mr. Melnichuk said.
But the company emphasizes to potential employees the opportunities for more responsibility — such as leading a project with a million-dollar marketing budget — and a faster trajectory up the ladder, compared with working at a multi-layered corporation, he said.
“It’s all about making sure that we sell our strengths. There’s pros and cons to working for a startup, and you can be honest about that upfront. So, you might make less money, but there’s potentially more upside,” he said.
Buytopia also offers employees options in which they can share in the business’s profits, he added.
Other benefits small businesses can offer include flexible work hours, a friendlier work environment and investment in training, said Athena Varmazis, American Express’ vice-president and manager of small business services.
“Does the organization have enough perks or enough benefits to attract the best and the brightest? This is an area where small business owners need to focus on, and do focus, but somewhat struggle in getting the balance right. In making sure they have a role that is well compensated, but it’s not the only factor.”
Yet, as the economy improves, albeit slowly, small businesses that have weathered the storm or have grown are increasingly spending more on new employees, Mr. McCrum said.
“Big companies can pay, they have always been able to. They have deep pockets. Nowadays, small companies have the perception that they can’t compete with the big companies on those total compensation packages. In the past couple of years, I’ve started to see that mentality shift.”
Small and medium-sized businesses can also take advantage of various grants offered by the federal and provincial governments to encourage hiring, such as financial support for hiring new graduates in the socalled STEM fields of science, technology, engineering and mathematics.
Some business owners are realizing that spending more on employees can produce better returns — both in the quality of the hiring and the ripple effects on the overall workforce, he added.
“Top talent tends to attract top talent; you start to build a cadre of very good people,” Mr. McCrum said.
Word of mouth is another key tactic in staying ahead of the competition while recruiting. “Small companies don’t have the brand name; they can’t go out and do national advertising campaigns, those big-ticket things. Attraction for a small company really revolves around their employees in my mind. You invest in them, and they become your ambassadors.”
Still, the No. 1 thing small business should do is make an extra effort to avoid vacancies in the first place, Ms. Blacklock said. That could include splurging on a holiday party, regular salary reviews or competitive wages, as she does at Prairie Girl, she said. The bakery has seen little turnover, she added.
“It might cost a little bit more in the short term, but in the long term, if you can minimize turnover, you’re saving yourself a lot.”