10 Tips for Surviving a Labor Shortage

Google “labor shortage in New England” and you’ll see a long list of articles lamenting what farm and hospitality business owners know too well.  A confluence of events has made it harder than ever to find good employees. Rents in Boston are so high that workers on the lower end of the pay-scale can’t afford to live here. And the guest worker programs that bring in seasonal labor from foreign countries through H2A and H2B visa programs are in jeopardy because of the new political climate.

In an ideal world, you hire the right employees for the right job. In this, tight labor market, many employers do not have that luxury. They make concessions – operate understaffed and/or hire less than ideal candidates.

You have a limited number of labor hours from yourself and employees, and you need to make the most of them. How do you get by as a business owner when you’re understaffed? Here are ten tips to get the most out of your employees and manage through a labor shortage.

1. Stay nimble 

When you operate with a limited staff, you can’t operate “business as usual.”  You need to keep your mind open to new ways of doing things. Roles and responsibilities may change. Procedures may change. Stay open to new ways of operating to ensure you can get the job done.

2. Promote loyalty

For the staff you have, you want to ensure they stay happy and keep working for you. Here are a few ideas.

3. Increase compensation

Compensation goes beyond dollars on the paycheck (though this is important too!)  You can increase compensation through benefits such as meals or food. Remember, if you’re selling tomatoes at $5 per pound –  that’s the benefit to your employee; but the cost to you is only $3/pound (or less).

Also, consider partnering with a like organization to increase benefits (if you’re a farm, partner with a restaurant).

4. Create systems

What can you do to help your employees work more efficiently? Do they need pictorial guides, or check-lists? Are there productivity apps they can download on their mobile phone? One great resource is The Lean Farm.  It guides farmers through every aspect of the farm business to find ways to create efficiencies.

The more your employees can accomplish in less time, the less you need more employees.

5. Delegate and outsource

It may be time to outsource some of your tasks to outside companies to free up your employees to other duties. Logistics companies make deliveries; HR companies manage payroll and benefits. What jobs can you outsource to free up your employees to focus on the tasks that must be done in-house.

6. Increase the perception of your company

Essex Farm in New York, No. 9 Park in Boston, The French Laundry in California, Sienna Farm in Concord… these are farms and restaurants that people clamor to work at. Why? Because they have reputations for best in class. It’s where aspiring farmers and chefs hone their skills and learn the trade.  These businesses always have a tall stack of resumes of people who want to work there.

Even if you’re not “best in class”, you can improve your reputation in other ways: by being a thoughtful manager, paying well, treating employees with respect, providing opportunities for learning and growth. If you gain a reputation as a good boss and employer, you will have an easier time finding employees.

7. Provide training

You hired motivated, smart people; but they may not have the skills you need: how do you drive a tractor or create an email communication? Effective training equips your employees to best do their job. If you have systems in place (#4) training will be easier.

8. Scale back your business

Grow, grow, grow. We’re taught as business people and entrepreneurs that we should always grow our business.  But sometimes, scaling back is the best way to get through a period of labor shortage. Scale back the business to a level that can be sustained with the labor you do have.

It can be a hit to the ego – no one wants to cut back their business. And of course, there are financial repercussions… a scaled back business often means less profits.  But you could do irreparable harm to your business and reputation if you continue to operate at a scale you cannot sustain – you risk selling an inferior product with inferior service.

Before scaling back, ask yourself:

  1. What is the minimum in sales you need to cover your costs?
  2. What are time drains on your business? Is there a product or service that take an inordinate amount of time but doesn’t offer the commensurate cash?

Understanding the answer to these questions can help you scale back most effectively.

As a side note — scaling back your business doesn’t always mean a decrease in profits. For sure, your revenue decreases, but you may operate more efficiently and maintain profits.

9.Avoid burnout

With the same amount of work, and less resources, it’s tempting to work harder and longer, and expect that of your employees.  But if you don’t take care of yourself and employees, you can make matters even worse. If you’re tired, you’re more likely to make mistakes and slow things down. You and your employees are more likely to injure yourselves… forcing you off the job and exacerbating the labor shortage.

Make sure you rest well, take time for exercise, friends, hobbies, and other pleasurable activities. You need to keep yourself in peak performance to get through these times.

10.Stay Connected

Don’t hole up in your kitchen or farm – get out and keep talking with friends, colleagues, and past employees. When you’re out and about, you hear things… people share ideas, and maybe they have new workers for you.

When you learn to get by with a reduced staff, you may discover efficiencies you never knew were there. Take advantages of these new-found skills for when the labor market improves.

What do you do to survive with a labor shortage? Leave a comment here or drop me a line.

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