You’re com­pet­ing against deep-pock­eted cor­po­ra­tions and low un­em­ploy­ment. It’s time to get cre­ative.

Inc. (USA) - - FRONT PAGE - By Leigh Buchanan

Last year, when Tai­wanese elec­tron­ics be­he­moth Fox­conn an­nounced plans to build a plant in Wis­con­sin and em­ploy 13,000 peo­ple, Erik An­der­son laughed. “I don’t know where they ex­pect to find those 13,000 peo­ple,” he says. “They’re not here.”

An­der­son is CEO of Jef­fer­son, Wis­con­sin–based Basin Pre­ci­sion Ma­chin­ing, a sup­plier of parts for cus­tomers like Har­ley-David­son. Re­cruit­ment “has al­ways been a chal­lenge, but it is beyond the pale at this point,” An­der­son adds. Wis­con­sin’s 2.9 per­cent un­em­ploy­ment rate “sounds im­pos­si­ble, but if you’re look­ing to fill po­si­tions, it feels pretty real.”

With the na­tional un­em­ploy­ment rate reach­ing a 17-year low, al­most two-thirds of fast­growth en­trepreneurs cite find­ing and re­tain­ing good peo­ple as their great­est ob­sta­cle to

growth, ac­cord­ing to a sur­vey of 2017 Inc. 500 com­pa­nies. Small and mid­size com­pa­nies such as Basin, which em­ploys about 200 peo­ple, are dis­pro­por­tion­ately af­fected.

Smaller em­ploy­ers strug­gle with hir­ing for sev­eral rea­sons, among them hav­ing lit­tle money to make com­pet­i­tive of­fers, lack of a vis­i­ble brand, and shal­low re­fer­ral net­works. With fewer in­cen­tives to of­fer, lur­ing day­one-ready work­ers is a chal­lenge. Many smaller com­pa­nies can’t af­ford to spend six months train­ing a new hire. And with no HR staff, CEOs of­ten add hir­ing to their own al­ready over­flow­ing plates.

Some busi­nesses have coped by low­er­ing their sights. Small com­pa­nies have be­gun weak­en­ing cre­den­tial and col­lege re­quire­ments, ac­cord­ing to job-post­ing ser­vice ZipRe­cruiter. That may be nec­es­sary, but it can some­times back­fire, sig­nal­ing to top can­di­dates that they are overqual­i­fied. “I never think it is a good idea to lower your stan­dards,” says Bill Driscoll, dis­trict pres­i­dent for Ac­coun­temps, a di­vi­sion of Robert Half. “In busi­ness, you should al­ways be shoot­ing to at­tract and re­tain the best.”

Of course, ramp­ing up the STEM cur­ricu­lum and boost­ing the num­ber of H-1B visas would ben­e­fit many com­pa­nies. And pre­serv­ing the Af­ford­able Care Act could make it eas­ier for cor­po­rate em­ploy­ees with pre­ex­ist­ing con­di­tions to jump to small busi­nesses with­out com­pa­ra­ble ben­e­fits. But those changes are out­side of en­trepreneurs’ con­trol. So founders need to get cre­ative. (For ideas on re­cruit­ing and on­board­ing tal­ent, read the pages that fol­low.)

Ted Fujimoto got plenty cre­ative back in the 1990s when he moved his sys­tems in­te­gra­tion and de­sign com­pany from Sil­i­con Val­ley to his home­town of Napa. The new lo­ca­tion was an agri­cul­tural Eden but an em­ploy­ment desert. “We couldn’t even hire ad­min­is­tra­tive as­sis­tants with the skills we needed,” says Fujimoto. “We were think­ing we’d prob­a­bly have to move again within a year.”

The so­lu­tion: To­gether with the lead­ers of five other tech­ni­cal trans­plants, Fujimoto ap­proached the Napa Val­ley Uni­fied School Dis­trict about launch­ing a pub­lic school whose stu­dents would grad­u­ate with the kinds of team­work and prob­lem-solv­ing skills the em­ploy­ers re­quired. That ven­ture didn’t just pro­duce the tal­ent pipe­line they were search­ing for; it also be­came the seed for one of Fujimoto’s next en­tre­pre­neur­ial en­deav­ors, the New Tech Net­work, which com­prises over 200 pub­lic schools around the coun­try that repli­cate his Napa model.

Most founders won’t go as far as Fujimoto to de­velop tal­ent. But they have an­other op­tion: lure it from big com­pa­nies. For­tu­nately, many em­ploy­ees are al­ready dis­posed in their fa­vor. Sixty-four per­cent of job seek­ers pre­fer small to mid­size com­pa­nies over large ones, ac­cord­ing to ZipRe­cruiter. And, in 2015, LinkedIn re­ported that peo­ple leav­ing com­pa­nies with more than 5,000 em­ploy­ees were more likely to go to com­pa­nies with fewer than 500.

ZipRe­cruiter’s re­spon­dents most of­ten cited the close-knit, fa­mil­ial feel of small com­pa­nies to ex­plain their pref­er­ence. Other mo­ti­va­tions in­clude “the no­tion of ac­cess to lead­ers, of see­ing more of the busi­ness, the abil­ity to learn, and the abil­ity to see the im­pact that their job has on the en­ter­prise,” says Bob Rosone, man­ag­ing direc­tor with Deloitte Pri­vate at Deloitte, which re­cently sur­veyed pri­vate com­pa­nies about their work­forces. “That is a pretty im­pres­sive value propo­si­tion for some­one weigh­ing a fast-growth in­no­va­tive com­pany against a larger cor­po­rate en­ter­prise.”

Tech­nol­ogy may also shake free some large-com­pany work­ers. Cor­po­ra­tions have adopted au­toma­tion much faster than small busi­nesses, which has neg­a­tively af­fected their em­ploy­ees’ job se­cu­rity, ac­cord­ing to a sur­vey by MindEdge, a learn­ing or­ga­ni­za­tion con­sul­tancy. By con­trast, just 9 per­cent of small busi­nesses in­vest­ing in au­toma­tion in­tend to re­duce staff as a re­sult, ac­cord­ing to the Na­tional Small Busi­ness As­so­ci­a­tion.

Basin Pre­ci­sion Ma­chin­ing has used tech­nol­ogy to re­place some jobs. But with the busi­ness grow­ing rapidly and ex­pe­ri­enced ma­chin­ists re­tir­ing, its re­cruit­ment ef­forts re­main in hy­per­drive. The com­pany has im­proved pay and ben­e­fits; sig­nif­i­cantly beefed up train­ing; and grown the HR staff from one per­son to five. It re­cently hired a for­mer re­cruiter for the Marines. “We fig­ured if he could re­cruit some­one to go to Afghanistan,” says An­der­son, “he can prob­a­bly re­cruit some­one to come to my ma­chine shop.”

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