Labor shortages are affecting the hiring of good people. How does a business change its recruiting practices to get the best workers?

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Dave Young:
Welcome back to the Empire Builders Podcast. Dave Young here along with Stephen Semple. And today, we’re not even talking about a product. We’re not talking about an empire. We’re talking about something that empires and businesses of all shapes and sizes need, and that’s good people. And we’re going to talk about how to find them. Stephen, you’ve got some thoughts on recruiting.

Stephen Semple:
Yeah. And if people go back to episode 59, we did a whole talk on demographics. And one of the reasons why we talked about demographics is frankly the challenge that businesses are going to face going forward, finding people. And I really encourage people to go back and listen to it, but just to summarize, so basically for the 70 years following World War II, what happened consistently every decade was the labor force grew. More people were entering the labor force than leaving the labor force due to the baby boom, women entering the workforce, and immigration. In 2020, something happened. 2020, that became more balanced in terms of the labor force did not grow in North America. In fact, what’s happening is our labor force is beginning to shrink. And when you look at demographics and you look forward, because we do not give birth to working-age children, and birth rates are low, we’re not replacing our population. The workforce is going to continue to shrink for the foreseeable future.

Our workforce is going to get smaller and smaller. That’s just the reality of it all. And that changes a lot of things, including recruiting. And here’s the interesting thing. So right now, we’re in a stage where people are worried about the economy and talking about a slow economy and whatnot. And what is our unemployment rate right now? 3.5%, which is a historic low. So even though we keep reading about, oh, there’s layoffs here and layoffs here and layoffs here-

Dave Young:
And nobody wants to work.

Stephen Semple:
Right. And that’s the fallacy. Nope, no, everyone’s working. Everyone is working. When we think about growing an empire, there are a bunch of things you need. You need scalable marketing, you need to use scalable sales, but you also have to be able to attract people. So I believe recruiting is going to become a really important part and an even more critical part of growing a business in the future than today. Because in the past, there were always people available. They aren’t any longer. And this is not just a North American phenomenon. A few years ago when I was speaking at the London Stock Exchange, I had a chance to meet business owners from all over Europe, France, and Sweden and whatnot, and they were all talking about the same thing. They’re all talking about this shortage of labor. This is a worldwide phenomenon. There are expectations that China’s population by the end of the century is going to be cut in half.

Dave Young:
Wow.

Stephen Semple:
That is going to be 500 million people rather than the billion it is today. So this is a worldwide thing. So now getting back to it. So to me, I believe that this is going to change how we have to recruit. Our whole strategy for recruiting, and I’m doing this with some customers, has to change because… Everyone says to me, “Oh, it’s not about the skillsets. Bring me somebody with the right traits and I will train them.” Well, what are some of the traits that we want them to have? Well, we want them to be hardworking, right?

Dave Young:
Yes.

Stephen Semple:
I want to hire people who are loyal, not just who are going to come to work for me and then look for the next job. So I want them to be hardworking and loyal. Here’s the issue. If they’re hardworking and loyal, you know what they’re not doing, they’re not looking for work. Now, who is my best opportunity? Somebody who’s hardworking, loyal, and unhappy in their job. If they’re hardworking, loyal unhappy, and not looking for work, who do I need to talk to? I need to talk to their spouse, their family, and their closest friend. Why? Because their spouse is not happy that they’re coming home every day unhappy. Most spouses are prepared for you to take a pay cut and come home happy. Their family believes in them and wants them to be happy. And their best buddy is tired of every time they get together for a beer, them being grouchy.

Dave Young:
Absolutely.

Stephen Semple:
So recruiting used to be trying to speak to the potential employee. Oh, I’m going to put it on Monster and I’m going to put it on all this other stuff. Our best prospects as employees are hardworking, dedicated, not looking for work, and unhappy, so who I need to talk to are the influencers.

Dave Young:
Absolutely. In advertising, we call that indirect targeting.

Stephen Semple:
Yes.

Dave Young:
Right? If you want to put Grandma and Grandpa in a nursing home, probably not Grandma and Grandpa that you want to talk to. It’s the kids. The adult children of Grandma and Grandpa, are going to be helping make those decisions.

Stephen Semple:
So recruiting now becomes about speaking to the influencer, the spouse, the family, the best friend. Now, the spouse, the family, and the best friend also know two things about the hero in our story. They know the person’s traits in terms of what they’re good at, and they know why they’re unhappy. And often the reason why they’re unhappy is because those traits are not being rewarded.

Dave Young:
Sure. Yeah.

Stephen Semple:
Right? That’s often a source of unhappiness. So now, I can create a mass media campaign that speaks to the influencers and paints the picture, I’m looking for somebody who has these traits. I’m looking for a detailed person. And all of a sudden the spouse is like, “Well, that’s my partner.” They come home unhappy. Maybe you should consider working for this person. This is one of these ones where it’s much more a long sales cycle because that person, again, because dedicated and hardworking, is not going to, on the first suggestion, decide to go and work for somebody else.

Dave Young:
Correct.

Stephen Semple:
It’s going to take a little while to work. But if we take a look at most recruitment ads, they say, “I’m looking for an engineer with four years experience, this degree, this skillset, and we offer a competitive salary. Here’s how much money we’re willing to pay.” Now, if that even attracts somebody, have you attracted somebody loyal? You attract somebody who goes, “Oh, this is good. I can make more money.”

Dave Young:
 They are hardworking and loyal, to get their attention, so you target the influencers, but you’ve got to actually do a pretty decent job to get the influencer on your side to actually start recruiting them for you.

Stephen Semple:
Yes. Now, the influencer is more likely, especially the spouse, is more likely to be attuned to looking for the opportunity because they have a partner who’s unhappy, and they actually have a wish that they would quit their job. So they are actually easier to reach because they’re actually a little bit more open to the message than the hero of our story. But it means we’ve got to craft the message so that we know that that person is going to receive it.

Dave Young:
For sure.

Stephen Semple:
What we know is that’s not a single message. We’ve got to talk to that person over a period of time. Now, here’s the other thing I think that becomes important, is that even if that spouse says, “Hey, you should consider working for these guys,” so for example, we do this for No Bull RV, “Oh, you should go work for Rick over at No Bull RV,” what is the hero of our story going to do? They’re probably not going to immediately go, “Okay, I’m going to.” They’re probably going to check them out. And where are they going to go? Social media.

Dave Young:
Sure.

Stephen Semple:
What are they going to do? They’re going to check the Glassdoor reviews, which are employee reviews of the place in terms of work. They’re going to check out social media. What’s this place like? And so I actually think social media is going to become a very important tool in recruitment. Not from the standpoint of somebody finding assigned to work, but somebody thinking about coming to work for you, checking you out in terms of what is your culture like? So in other words, social media has to give a glimpse inside of the company. Now, imagine this, Rick at a No Bull RV has had this happen where he gets a potential recruit who has reached out to him, and said, “My spouse heard your ad on such and such, and thought I should check you out. I’ve gone through your social media. Boy, I really like what you’ve done here. Boy, Susan, she seems like a hoot.” How good a potential prospect is that employee?

Dave Young:
Pretty good.

Stephen Semple:
And how well will they fit into your organization?

Dave Young:
If they see themselves there, sure. Yeah.

Stephen Semple:
And they see themselves fitting. I actually think that what we need to do going forward is we have to actually look at recruiting as being a 52-week-a-year activity. A separate budget that we market the business as being a great place to work, where we specifically craft ads that speak to the influencers.

Dave Young:
I’ll tell you this too. This won’t work for every business because people leave bad businesses and bad managers.

Stephen Semple:
Yes.

Dave Young:
So if you’re running a pretty shitty place to work right now, this strategy is not going to help you.

Stephen Semple:
It’s true.

Dave Young:
Your best bet is to put resources into improving your culture, making it a better place to work, and that’s investing dollars into your business.

Stephen Semple:
And thank you for pointing it out, Dave, because I went with the automatic because I’ve been thinking about it for companies that we’ve been doing it for where I know they have high retention.

Dave Young:
We know that they’re great people, right?

Stephen Semple:
Yes.

Dave Young:
We know that about Rick. This is bad advice. If you have a crappy culture. If you’re losing your best people on a fairly regular basis, this is not something that will help turn the tide. In fact, you may lose people even faster.

Stephen Semple:
Well, the part that I find that’s interesting on that front is businesses, if they get a bad Google Review from a customer, kind of flip out over it and are sort of like, “Okay, well, we’ve got to fix that.”

Dave Young:
Yeah.

Stephen Semple:
This is as important, if not more important going forward, that you’re going to be a good employer. And look, that also means there’s a challenge for businesses. This is yet another challenge that if you are running a low-margin business or running a business that drives itself on sales and promotions, which means low margin, that it’s going to be hard to compete in the future because treating people well costs money

Dave Young:
To pay them well.

Stephen Semple:
Yeah, you got to pay them well, you’ve got to give them good benefits, you’ve got to treat them in the right manner. And one of the challenges today is if I’m short people… Here’s where the catch-22 can become today. I’m short people. Let’s just use a restaurant as an example. I’m short two servers. I can’t find them. So now what I’m going to do is I’m going to overwork my existing servers. Right?

Dave Young:
Yeah.

Stephen Semple:
I actually think an employer would be really smart if they said, “Until I find those two people, I’m going to actually pay you guys a little bit of extra money because I know you’re having to do some extra lifting.” Because now, what’s happening is you’re creating this vicious cycle, and we see this a lot in even social media postings, creating this vicious cycle for the people who are still working for you are now having to work harder short people. Now, they’re leaving. They’re unhappy going, “You know what? I’m tired of being ground down just because you can’t find people. The fact that you can’t find people is not my problem.”

Dave Young:
Yeah. Creating a happy culture where people are well-paid. Man, it comes down to so many things, but we talk about businesses that have a decent profit margin as being the ones that can afford to do a good advertising campaign.

Stephen Semple:
Yes.

Dave Young:
Right? Having a good profit margin also means you can afford to pay people and keep them happy and keep them around.

Stephen Semple:
Yes.

Dave Young:
I saw, I think this was just a cartoon or a meme, but the boss is saying, “Oh my gosh, Mary wants a raise and I don’t think we can afford to give it to her.” And the HR person says, “Well if we can’t afford to give her the raise, we certainly can’t afford to replace her.”

Stephen Semple:
Right.

Dave Young:
When you consider what that entails, bringing somebody new on and training them, and just getting back to where you were. It’s like, keep your people happy.

Stephen Semple:
Let’s also look at it another way. There’s been a power dynamic shift that has started to happen and is going to become more powerful as we go forward. And the shift is the employee has more power today than they used to have, and are starting to have more power than the employers. And here’s where we’re seeing it. Every day, we hear announcements from companies going, “Okay, no, I’m demanding that people return to the office. This time, I mean it.” Right? There was one recently from GM where it’s like, “This time, we mean it.” And it’s like, yeah, but you’ve said this a couple of times, and here’s what you suddenly realized. There were employees who were like, “Screw you. I’m not going back to the office.” And what couldn’t you do? You couldn’t fire them. And often, they were your best performers. They were your absolute best performers.

It’s interesting, a friend of mine, and his wife work remotely, and they were called to go back and she didn’t want to go back. And so I said to her, I said, “Here’s what you should negotiate. You’re allowed to continue to work from home as long as you keep your rating. The moment your rating slips, you have to go into the office.” Said, “I’d make them that deal, otherwise you’re quitting.” And it’s like, well, that’s a fair deal because the argument that you have got to come back into the office is productivity. Well, if I keep my productivity ratings where it is, I should be allowed to work wherever I want to work. That’s a fair deal.

Dave Young:
Yeah. I’ve seen him making the case for just the workplace camaraderie and getting to know people who might be in a position to give you advancement. And that’s all. There’s a certain ring of truth to it, but there are also some people that I think are maybe pushing back to work because they have a lot of money invested in commercial real estate.

Stephen Semple:
Well, there’s part of that, but the other part is there’s a fallacy that if the person’s in the office working, I know they’re working. If they’re home, I don’t know where they’re working. But here’s what I’m going to tell you, just because they’re sitting at their desk in the office, you don’t know that they’re working.

Dave Young:
Exactly.

Stephen Semple:
I used to work with a wedding planner, and what I was surprised by is that they did not do any work on evenings and weekends. I said, “Well, how do people plan their weddings?” They go, “Oh, it’s done nine to five.” “Oh, during lunch hour?” “Oh no.” She goes, “We get no calls during lunch hour. It’s during working hours.” We have to actually adjust… I know we’re getting off of recruiting here, but we actually have to adjust how we measure somebody these activity, and it has to be results-based. We have to learn how to also manage people differently in this remote working environment. But the other part is if that’s what our employees want, that’s what we need to give them.

Now, there is one thing I will say that I think companies need to adjust, and this will speak more towards retention. So there was an interesting study done by Gallup. I think it was the first to break all the rules, and it was a massive survey that Gallup did of employees. What was interesting about the surveys, they broke the survey results up where they said, okay, I’m just going to look at the survey results of top performing employees versus everybody else and what’s different so they could isolate what was important to top employees. One of the things that’s important to top employees is having a friend at work and feeling all of this sort of connection.

On one hand, that would argue for bringing people back to the office, but there’s another way to do that. And we do that as Wizard of Ads Partners. So all of us work remotely. We’re from all around the world. But twice a year, we get together. And that twice a year to get together is not educational and new products and all this other boring bullshit. The most important part of it is getting together for dinner, getting together for lunch, hanging out, building interpersonal relationships and having a friend at work. So I think what companies need to do is start investing in those sorts of events for their remote workers.

Dave Young:
Yeah, I think that’s great advice. Great advice.

Stephen Semple:
But going back to the recruiting, got to get your head around they’re hardworking, they’re not looking for work, they’re unhappy. You have to speak to the influencer.

Dave Young:
Yeah, great discussion. Appreciate you bringing it up. And remember that indirect targeting.

Stephen Semple:
Yeah.

Dave Young:
Look for the people that are influencing them that are maybe unhappy because they’re unhappy.

Stephen Semple:
Right. And this issue of the tight labor market ain’t going away. It’s just going to get tighter.

Dave Young:
Yeah, I agree. All right.

Stephen Semple:
All right. Thanks, David.

Dave Young:
Well, I’m looking forward to our next talk on the Empire Builders Podcast. Thank you, Stephen.

Stephen Semple:
Thank you.

Dave Young:
Thanks for listening to the podcast. Please share us, subscribe on your favorite podcast app, and leave us a big fat juicy five star rating and review. And if you have any questions about this or any other podcast episode, email to questions@theempirebuilderspodcast.com.

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