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Area small businesses navigate workforce challenges  

June 5, 2023
Work Matters Column by Jim Rachlin

According to the April 2023 Jobs Report from the National Federation of Independent Business, small business owners are facing ongoing challenges in their efforts to find workers. According to the data, approximately 45 percent of all small business owners (seasonally adjusted) reported having job openings that they were unable to fill during the current period. This percentage greatly surpasses the historical average of 23 percent over the past 49 years. The struggle to find suitable candidates for open positions is further highlighted by the fact that 92 percent of employers who were actively hiring, or planning to hire, experienced a scarcity of qualified applicants.

We’re fortunate to live in a thriving region with opportunities stemming from the stability of Fort Knox and large projects such as BlueOval SK and Nucor, but small business owners in the Lincoln Trail Area Development District (LTADD), who already were dealing with workforce shortages before COVID, now feel ever-increasing problems that accompany a tight labor market, along with other major obstacles such as inflation. As an experienced business owner who interacts with fellow entrepreneurs in the area, and as a member of the Lincoln Trail Workforce Development Board (LTWDB), I have observed some common challenges area small businesses face and strategies they employ to address these issues.

In a tight labor market, one significant challenge faced by small businesses is the need to increase wages to retain and recruit talent. Most, if not all, small businesses have recognized the importance of offering competitive wages to attract qualified employees. By doing so, they hope to attract new hires and overcome the scarcity of available workers. 

“The availability of good jobs and careers has never been more abundant than now and it’s never been a better time to be a job seeker,” said Christopher Cottrell, a LTWDB member and manager of Ray’s Ford Chrysler in Brandenburg. “However, this has made it more difficult for employers to fill positions. Personally, I think the challenge has allowed good employers to shine and others to see where improvement is needed.” 

In the pursuit of navigating a tight labor market, it is important for businesses to strike a delicate balance when raising prices to cover the increased wages and other inflationary factors. Simple economics dictates that when prices rise, consumers tend to reduce their consumption, potentially leading to a decline in customer traffic. Small businesses often lack the ability to define the market price on their own, so they must be cautious not to raise prices excessively, which could harm their business. It is crucial to find the right balance that covers costs without deterring customers.

Moreover, small businesses often face challenges in negotiating with suppliers, lacking the leverage compared to larger companies. In the face of excessive price increases from some suppliers, small businesses have had to adapt by reevaluating services and suppliers. Successful businesses quickly identify who the trustworthy partners are during market chaos and make adjustments accordingly. This adaptability is essential for small businesses to weather inflationary pressures and maintain their operations.

To reduce turnover and improve employee retention, small businesses have implemented various adjustments. Increasing the wage structure to remain competitive is a common practice, but it is not the only solution. Some businesses have also reviewed their scheduling to offer greater flexibility. They have noticed a trend of employees desiring shorter shifts or fewer working days due to family and childcare commitments. By accommodating these needs, businesses have been able to attract and retain more staff. However, managing the complexity that comes with flexibility and additional employees can be more stressful for managers.

Jerry Dubree, a LTWDB member and owner of Commonwealth Machining in Harned and Nettie’s Restaurant in Hardinsburg, said that a lack of steady transportation and childcare among employees are major hurdles small businesses face.

“Several large companies that I work with have their own daycare,” he said. “Small businesses often don’t have the means to offer in-house childcare, which can be a unique disadvantage as prospective employees prioritize family commitments.”

In addition to adapting work patterns and improving compensation, many small businesses have recognized the importance of investing in training. They understand that providing new hires with the necessary knowledge and skills not only benefits their customers but also increases job satisfaction and employee retention. Substantial investments in training reinforce a sense of professionalism and commitment within the business.

To help address workforce challenges in the area, the LTWDB exists to oversee area Career Center locations, select service providers, and ensure the region's workforce needs are met. The board consists of 23 business and community leaders across Central Kentucky promoting a thriving, responsive workforce system supporting business success, growth and job creation. By convening stakeholders, raising awareness of regional needs and facilitating connections, the LTWDB helps businesses address their workforce challenges. The board's focus on increasing the area workforce participation rate, currently around 60 percent, is particularly relevant. 

The Kentucky Career Center - Lincoln Trail (KCC-LT) offers a variety of services for both employers and employees alike. From job fairs to training opportunities to summer work programs, opportunities for employee and employer connections are bountiful through KCC-LT. In fact, the new Let’s Talk Tuesdays Virtual Job Fair events, which take place on the first and third Tuesday of each month, have been increasingly successful in helping connect employers with prospective employees. It is crucial for area entrepreneurs to understand that these resources offered by KCC-LT are not exclusively for larger corporations, but are equally valuable for small businesses.

To learn more about services offered through KCC-LT, visit ltcareercenter.org. 

Jim Rachlin serves as President of Rachlin Enterprises Inc. and Supercuts of Central Ky, Workforce Instructor at Elizabethtown Community and Technical College, and is Secretary/Treasurer of the Lincoln Trail Workforce Development Board. 

The Kentucky Career Center – Lincoln Trail helps match job seekers with local employment and training opportunities. Our business solutions team offers employers of all sizes and industries personalized support to build a competitive workforce. We are an equal opportunity employer.

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Program is funded with Workforce Innovation and Opportunity Act Title I funds through the Kentucky Education and Labor Cabinet and the Lincoln Trail Workforce Development Board.