From the September 1997 issue of Entrepreneur

The national jobless rate continues to hover at about 5 percent, with unemployment in some states dipping below 3 percent. While this may be good news for workers, it's another challenge for employers. When you combine low unemployment with the need for greater job skills, it's easy to understand why competition for qualified workers is stronger than ever.

What can you do to attract the caliber of employee you need? Peggy Isaacson, a human resources consultant in Orlando, Florida, suggests beginning with a creative search plan.

"You can't just place a help-wanted ad in the newspaper and expect to be flooded with top-notch candidates," Isaacson says. "While advertising has its place in the hiring process, it's not enough. In this market, good people won't just come to you; you have to aggressively look for them."

Some techniques Isaacson recommends:

  • Tap into your personal and professional networks. Tell everyone you know--friends, neighbors, professional associates, customers, vendors, colleagues from clubs and associations, and so on--that you have job openings. Someone just might know of the perfect candidate.
  • Establish an employee referral program. Encourage your current employees to recommend your company to people they know, and offer cash bonuses for referrals that result in hiring.
  • Contact school placement offices. List your openings with trade and vocational schools, colleges and universities. Check with your local school board to see if high schools in your area have job training and placement programs. For example, the new Toledo Technology Academy in Toledo, Ohio, has developed a special curriculum to prepare high school students for high-tech manufacturing jobs.
  • Post notices at senior citizen centers. Retirees who need extra income or a productive way to fill their time can make excellent employees.
  • Use an employment agency. Private and government-sponsored agencies can help with locating and screening applicants; often their fees are more than justified by the amount of time and money you save.
  • List your opening with an appropriate job bank. Many professional associations maintain job banks for their members. Contact groups related to your industry, even if they are outside your local area, and ask them to alert their members to your staffing needs.

Once you find a candidate, be sure you have something to offer and present it well. "When I teach job-search skills, I tell candidates they have to sell themselves in the interview," says Isaacson. "The employer has to do the same. You need to sell the applicant on accepting your job offer."

To persuade a candidate to join your company, Isaacson suggests:

  • Be sure your compensation package is competitive. The salary should meet or exceed industry standards for your area and include as many perks as you can afford. "To people who say they can't afford to pay decent wages, I ask `How can you afford the cost of turnover because you can't keep people?' " Isaacson says. "You'd also be surprised at the type and scope of benefits you can offer at little or no cost to the company, if you're creative."
  • Create a working environment that is positive and inspires loyalty. Take a look at your facility through the eyes of an employee; would you want to work there?
  • Treat the candidate courteously and professionally throughout the interview process. "How you treat candidates is a strong indication of how you treat employees," says Isaacson.
  • Introduce the candidate to existing employees. Isaacson says this allows the candidate to see the people he or she would be working with so you both have a chance to determine the potential compatibility. You can also go back to your employees after the interview and get their impressions of the candidate, which may help you make the right hiring decision.

Finally, always be on the lookout for good employees--even when you're not actively hiring. Isaacson notes, "You never know when you're going to meet someone who is perfect for your company.Neither one of you may be looking at the time, but if you make a note of that person's qualifications, they just might be interested in talking to you when you do have a spot to fill."

Rumor Has It

The spread of misinformation can be more damaging to a company than any crisis. This is especially true in smaller organizations, where workplace rumors can cause enough concern and insecurity that morale and productivity suffer, and your best employees may decide they'd be better off working somewhere else.

Video Arts Inc., a Chicago-based business training company, has introduced "The Grapevine," a30-minute training video designed to teach companies how to deal with and prevent damaging gossip. Ann Boland, Video Arts' general manager, says smaller businesses, which are dependent on a few key employees, often suffer more when the rumor mill is in high gear. She offers these tips for getting your company through times of major change:

  • What employees are not told, they invent--so tell them what's going on before their imaginations take over.
  • Honesty acts on a rumor like water acts on a fire. Cut the grapevine back with the truth.
  • Keep your work force informed at every stage of change in order to avoid panic and to help employees feel like they are an important part of the process.
  • Avoid closed doors. They're a sure sign that secrets are being told.
  • Clear, direct, face-to-face team briefings, where questions can be asked and answered, are the best way to communicate news. It may be tempting to hide behind memos and e-mail, but these should be used only as a supplement to face-to-face meetings, not in lieu of them.
  • Encourage questions and invite ideas. When you gather the experience of the group, your staff may identify unforeseen problems and devise solutions.

You can rent "The Grapevine" for $250 a week or purchase it for $870. Contact Video Arts at (800) 553-0091, ext. 2213.

Second Helping

How do you know when it's time to expand your business to a second location? Rick Davis, CEO of CCG Venture Partners LLC, a Houston firm that specializes in helping single-location businesses expand to multiple markets, suggests a five-point test.

1.Do you have the desire to make the effort, take the risk, and own a business that you don't personally operate? "Owning and operating a business is very different from owning a business that someone else operates for you," Davis says.

2.Is your business performing well financially? If your first location isn't doing well, chances are a second one won't, either.

3.Do you have the know-how to own a business that you don't operate? "This requires an entirely different set of skills," Davis says.

4.Is your existing business running smoothly? Consider how much time your business requires; be sure that you can realistically take time and energy away from it to focus on a second location.

5.Do you have the money? Opening a second location takes initial capital as well as operating funds. Davis recommends having sufficient cash resources to get you through a worst-case scenario.

Give 'Em Credit

Long thought of primarily as a big-company benefit, credit unions are opening their doors to small businesses. Andrew Lingo of Chaco Credit Union in Hamilton, Ohio, says there are approximately 6,000 well-established state-chartered credit unions in the United States and Canada that accept new companies as members--at no charge to the businesses.

The benefit to your employees is threefold: They'll probably increase their savings rates (especially if you offer automatic payroll deduction), they'll have access to lower loan rates, and they'll typically pay lower fees--if any--for services.

Only state-chartered credit unions are able to add new companies to their memberships. (Federally chartered credit unions are restricted from accepting new companies until a legal battle between the credit unions and banks is resolved; the case will be heard by the U.S. Supreme Court later this year.) To find a credit union that will accept your company, Lingo advises contacting your state's league of credit unions or simply calling a local credit union.

Once your company is approved, Lingo suggests designating one person as the primary liaison with the credit union; that individual will maintain information about membership, as well as enrollment forms and loan applications. It's also a good idea to ask a credit union representative to conduct on-site enrollment to kick off the benefit and perhaps return periodically for follow-up or new sign-ups. Finally, Lingo says, it's important that the business owner lead by example--so be the first person to sign up.

Contact Sources

CCG Venture Partners, (713) 893-8331, ext. 111, http://www.ccgvp.com

Chaco Credit Union Inc., (513) 868-5720

Peggy Isaacson & Associates, 1415 Jubal Dr., Orlando, FL 32818-9070, (407) 290-1146

Video Arts Inc., (800) 553-0091, videoart@interaccess.com