Preventing Skilled Labor Turnover

Turnover is a costly issue that affects all industries, but especially skilled labor sectors. There’s a huge gap in the skilled labor market right now and preventing turnover is important.

Plumbers, electricians, roofers, floorers, truck drivers..etc are leaving the field faster than new individuals are entering it. The list of skilled labor fields that are facing a gap has authors like Jeff Cox of CNBC sounding the alarm on the U.S. labor shortage .

There are definite challenges to this gap.  The good news is there’s also key steps to take now that will help reduce turnover.

Begin by focusing your recruiting efforts on rural communities.

In rural communities, a mine of untapped skilled laborers exist. They graduate from trade schools with a sincere desire to make a career out of being an electrician, plumber, or HVAC technician, but then they find a difficult field of dirty work and low pay.   They can’t afford to leave the area in search of work. The solution? Recruit them and provide market leading wages. This will take some unique tactics. so if you want to know how to recruit a skilled laborer from a rural community that will stay, check out recruiting in rural communities.

Offer truly competitive wages.

You can’t operate your business without skilled labor, so you’ve got to make sure they’re not going to jump ship. Think of it this way: the cost of losing an employee is anywhere from .5-1.25 their annual salary.

When you think you can’t afford to pay someone a reasonable salary, you’re going to be wasting money hiring them for less than they are worth. Don’t lag behind industry pay trends. Want a salary analysis done? Contact us to get started.

Once you’ve got your position filled, keep the employee engaged.

There’s not a lot of engagement in the workforce today and a lot of “experts” like to say this is just because the “millennial” generation is “bad” and “unwilling to work.” This isn’t the case, the world is full of brilliant and hard-working individuals of all ages–it’s a matter of finding them and putting them to work. Sure, you might be thinking, this is simple to say, but impossible to do. If you’re struggling to find the right trade people, consider investing in a recruiter that specializes in trade-labor recruiting or in a temp agency.

Realize and react to the new job market.

For generations, employers have had the upper hand of hiring: they’ve had access to more employees than they needed. Naturally, this led to employees fighting for jobs and put employers in the position of “customer.” However, as of 2018, the tables have turned. There are now more job openings than workers to fill them.

Because of this change, employers need to realize that this puts employees in the position of power. So, providing realistically valuable reasons to work for you, is a basic requirement, not a favor to employees.

This may shift again in favor of employers very soon, but right now the market change means stepping up your value as an employer.  By increasing your value proposition, you will find and skilled labor that will make a difference in your business.

Build loyalty and stop expecting it.

The reason that it’s so hard to keep employees isn’t just because of a paycheck: employees leave for many reasons. Often, skilled labor leaves for reasons that may surprise you. Check out these Reasons that people leave their jobs.

The biggest part of the workforce as of 2018 is the millennial workforce.  They get a bad wrap, but realistically, these individuals grew up seeing their parents laid off and their co-workers fired as soon as the ROI didn’t meet projections and needs.

This is business: you understand that and now the employee does too. So, you can’t expect instant, undying loyalty when you don’t provide this in return. Building loyalty means providing value and culture and it means being different than your competitor. When you know what your employee values, you can target your employee and build loyalty. 

This list may seem overwhelming because it includes making many changes that will take time. However, if you start right now, tackling the problem that exists you will see improvement in turnover rates. In the long-run, this approach will make a difference for you and your business.

Recruiting in Rural Communities

Recruiting in rural communities has many benefits. Rural communities are an excellent resource for skilled labor. They are primary locations for tech schools and career colleges. Additionally, rural communities are full of individuals who lack decent job opportunities.

These communities also come with a very special set of challenges.

Unwillingness to travel.

Within these small communities the lack of career opportunities can stagnate the local economy. As a result, many individuals do not have the ability to travel. Those that do have the ability to travel may remain because they have family obligations.

So, finding people that will travel may be difficult. To solve this challenge, it’s important to ask about a candidate’s willingness and ability to travel. If a good candidate is willing to travel, but unable, then the company has a choice: Dismiss a great candidate or find ways to make travel possible.

Reduced or limited access to technology.

In rural cities, your ideal candidates may not connect to traditional recruiting mediums. This is especially true for skilled laborers. You will need to use a process of trial-and-error to recruit these candidates. In some cases, traditional job boards may yield excellent results.  In other cases, you may find you need to go to local community organizations for results.

Aging populations.

When a city is not economically growing, the population will naturally decline.  This is because working-age residents will consistently be leaving in search of lucrative opportunities. So, most rural communities will have individuals who have decided to retire and are past the years in which they want to work.

Skilled labor often requires heavy manual labor. So, some individuals that still want to work may be interested, but then find that they cannot keep up with the physical demands of the position. REMEMBER THIS: There will always be exceptions.  Be open to having a lot of great older candidates.

Also, be open and honest about the job expectations . Many candidates will hear about the level of physical work required and decide they cannot take on this heavy work. As long as you communicate realistic job expectations, the candidates that take on the labor will likely be able to perform the work, regardless of their age.

Complex social infrastructure that provides barriers to making contact with candidates.

This challenge is actually a huge benefit to the recruiter. In most cases, rural cities are small and close-knit. This means that a candidate will be difficult to reach, unless you go through the appropriate social mediums. Take some time to feel out the social atmosphere where you are recruiting. You may find that the fastest way to recruit is by going to a networking event or holding open interviews, rather than sending emails.

So, beyond facing these key community challenges, there are tips and tricks you can use to get ahead in the recruiting game.

Don’t forget these extra nuggets when you recruit in rural communities:

1. Contact the educational centers and tech colleges.
2. Treat your newly graduated candidates well.
3. Hold open-interviews in community areas.
4. Be willing to advertise with unconventional tactics: bars, gyms, local agencies, churches, and strategic community partners.
5. Always check to see how word-of-mouth travels and use this knowledge to your advantage.
6. Go to festivals, social clubs, and networking events.
7. Be transparent about what the job requires: set realistic expectations for all candidates.
8. Look for entrepreneurs.  These individuals have gone into their field because they intended for it to be a lifestyle.  If your goal is to find people who won’t leave your company because they got a “cushy” office job, then you want to look for people that are committed to the work they do.
9. Be ready to help with travel expenses for those that can’t travel, but are willing to travel.
10. Prepare retention strategies in advance: contracts, incentives, and flexible scheduling.

The 4 stages of a restaurant business

Growing up, I dreamed of launching a restaurant. Actually, I dreamed of growing an empire. When I actually launched my first restaurant: there were a lot of surprises. One thing I learned is that there are 4 major stages a restaurant goes through on its way to success. The life-cycle of a restaurant is similar to the tech trend Hype Cycle. However, the Restaurant Life Cycle follows some different patterns.

Phase 1. The launch phase.
The launch phase is the exciting time in which you open your doors to the public, put forth your advertising, and test your idea. It’s the critical time in which your first customers come through your doors, you will make a lot of mistakes and work constantly during this phase. You will be surprised by the employee mistakes and the harshness of customer expectations. The best thing to do here is be as prepared as possible–and then expect problems to arise. Respond quickly and always consider the long-term ramifications of your choices. What will you choices today say about your brand tomorrow?

Phase 2. Hype-Phase. This phase kicks in right within the first 6 months of most restaurants opening. This is the time when your sales are at their highest. You hit what’s called a critical mass: enough people have heard about your business that they come and try to it out and there’s also just enough word-of mouth for your business to feel viral. During this phase, many restaurant owners get stars in their eyes, picturing themselves as wildly successful with scores of chain restaurants under their belt. This is actually a time to be carefully monitoring your customer’s satisfaction and listening to what they want. Do you get a lot of complaints about your best seller item? Do folks like your environment? Is there one thing that literally everyone asks for you don’t have yet? What’s the “vibe” that your customers are getting from your business? The reason why it is especially important to ask these questions is that during this hype-phase, the biggest number of your customers are figuring out what they think of your restaurant. If they don’t like it: they’re not coming back. You won’t be able to keep everyone coming back, of course, but you do want to make sure your product is something that brings a lot of your customers back through your doors.

Phase 3. Down-Cycle/Trough of Disillusionment
Your sales will start to drop dramatically. This is a sign that the hype is over, the brand of your business is established and understood by the general public. You will see your sales drop dramatically and may have to make adjustments to make sure your spending doesn’t overrun your sales. During this period, it is important to recognize it is a stage. A lot of restaurants don’t leave this stage because they get discouraged and quit. This down-cycle usually hits between 8-10 months of opening and lasts an average of 3-6 months. It often comes with a seasonal slow-down, the opening of a new rival business, or the natural slow-down that comes with the exciting “newness” of your business being over. This is also the point in which many staff will leave and turnover/performance issues can become a problem.

Phase 4. Stabilization/Seasonal Cycles

This final phase is only reached once you see a sustainable sales pattern emerge. It takes most businesses around 3 years to fully establish a good flow to their sales and an understanding of their natural seasons. Stability results in a slow, steady growth of business with seasonal drops based on the year and location of your restaurant. At this point, many restaurants will add in new products to re-start the “hype” phase, or cycle in an additional service. The key risk during this phase is a major disruption or a slow decline rather than slow growth. A major disruption can through your business through an additional down-cycle and if you don’t have the capital that disruption can cause you to close very quickly. A slow decline means that for one reason or another your business isn’t growing. In this circumstance, you have a two options: 1. Figure out how to change the slow decline or 2. Close your doors.

There you have it: the 4 stages every restaurant goes through to success. While any restaurant business is risky, it is also an exciting way to get your entrepreneurial feet wet and to teach many business lessons to you along the way. If you’d like some help figuring out where to start on your planning, check out our free resources page.