Eliminate Bias in Hiring to Combat Low Unemployment

US unemployment in the 2nd Quarter stood at 3.5%. This is the lowest rate since the 1960s. It caps the culmination of the trend starting in 2010. However, this rate isn’t equal. At nearly full employment for certain pockets of the population, we need to look at typically underserved workers as potential hires to fill the demand.

Thinking about making changes to your business? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Young African American Unemployment Remains Stubbornly High

We’ve talked before about unretirement and job hunting amongst the elderly, but younger people are at just as much of a disadvantage. 

Across the age range of 25-34, Asian women fair the best with 2.1%. White men & women, Asian men, and Hispanic men have roughly equal unemployment rates (2.8-3.2%). Where things are a little different are with African American men and women and Hispanic women. Hispanic women are a full point higher than Hispanic men. African American men and women have similar rates (around 6.0%), but double that of all other ethnic groups. 

LGBTQ Inclusion

While there are no hard statistics on LGBTQ unemployment. Discrimination amongst transgender remains strong. As does, LGBTQ persons of color. It would stand to reason that their unemployment is likely higher than their non-LGBTQ counterparts

Eliminating Bias in the Hiring in Hard Work

Eliminating bias in hiring is extremely difficult. As humans, we all carry a perception of people different from us. It how we evolved, and it’s how we are socialized. Our tribe vs. theirs. This doesn’t let us off the hook, but rather, we all have to be honest with ourselves, however difficult it may be, to acknowledge where our biases lie. Only then can we deal with them.

Tips to Help with Eliminating Bias

According to the Harvard Business Review, here are some dos and don’ts to consider in your hiring process to eliminate unintentional bias in the process

Do's

      • Experiment with the wording of job listings by removing adjectives closely associated with a particular gender. 
      • Ask candidates to take sample work test, or provide a sample of how they solve a problem appropriate for the job. It’s useful in comparing applicants and it’s an effective predictor of future job performance. 
      • Control for your personal feelings about a particular candidate by giving likability a numerical score.

Do Not's

        • Engage in unstructured interviews. Instead, standardize the interviews process by asking candidates the same set of defined questions. 
        •  Allow surface demographic characteristics to play into your résumé review. Use a software program that blinds that information and ensures a level playing field. If you can’t afford software, blind the names

In Summary...

With the economy near full employment, bias can hurt our ability to compete and obtain the best candidates; so eliminate that mentality. Plus many States have tax incentives geared towards helping these disadvantaged groups. For example, New York State Youth Jobs Program provides up to $7,500 in tax credits for hiring disadvantaged youth. Even if you put half of that into job training, you will still come out ahead. 

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

How Small Businesses Can Struggle in This Economy

struggling business economy

Small business struggle in a strong economy for two simple reasons: talent and time. Not time in the sense of hours in the day, but burnout. Low employment numbers mean small businesses have to think about recruiting talent differently than in the past. And added to that, burnout is real and can make you far less productive than you want to be. Regardless of economic conditions, the rate of which small businesses close is remarkably consistent, and you can read on to see the signs to be aware of.

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Let’s Start at the Beginning

To appreciate what’s going on today, we have to start at the beginning of this 10-year business cycle. In 2009, we were just beginning to emerge from the most disastrous economic crisis to hit the country since the Great Depression. As a result, small businesses were struggling, and there was a significant drop-off in small business creation. Some major stumbling blocks included access to capital, decreased profits, and a reduced ability to hire. In fact, it was the first time in a long time when small businesses were employing less than ½ of the total U.S. workforce.

That’s a nice history lesson, but it misses some important facts. Fewer businesses were started during the period between 2009-12. Given that the rate of businesses closing is typically constant, fast-forward 3-7 years after the recession and we’re left with a gap. So, there was a lag in the tightening of the labor market. Now, the gap has closed and the competition over workers has increased.

Health Care and the Affordable Care Act

So much has been written about the ACA or ObamaCare. But, the truth is we will never know its true impact because it never was fully implemented. From its inception, significant roadblocks and intentional sabotage makes any clear read impossible. What is true is that the cost of employer-sponsored health care has dramatically increased, peaking in 2017. Because of all the smokescreens and gaslighting from all the vested interests, we still don’t have a clear picture as to why. We only know that the cost of offering benefits has increased the cost of hiring new employees. Hopefully, HRA changes will help alleviate

Hopefully, HRA changes will help alleviate some pressure, but providing health care to our workers is still a major issue. On the campaign trail, several proposals are on the table. Whether or not they have a chance of seeing the light of day will depend heavily on the 2020 election.

Burnout

Burnout is a very real and very constant reality that most small businesses struggle with at some point. But, is exiting the right solution? Perhaps for some, it is. But, we would challenge that perspective for all. Selling your business is an option. However, to do that, the business needs to be structured so it can function without the owner. If the owner is the business, then our options are limited. It requires us to stop thinking like we’re a mom-and-pop shop. Instead, we need to think as if we were a small corporation with systems, process, and structure. These entities can exist long after the owner decides to exit.

Possible Solutions to Help

Let’s look at three possible solutions that may help small businesses struggle in a strong economy.

Talent

If we can break out of our conventional thinking, there are several ways small businesses can be creative when offering packages to new hires. Yes, people are motived by money. But, they are motivated more by feeling valued.

Healthcare

When it comes to health care, there is no simple solution. Since conditions vary widely from state to state, the right solution for your business will require some research. The options to consider SHOP, group policies from a private provider, or adopt the HRA approach.

Burnout

We are less likely to burn out if we have a clear exit strategy. We know what we want the business to be. In addition, we structure it so it can eventually run without us as owners. It’s easier to value a business like this. It’s easier to sell it. Most importantly, it easier to leave when you’re ready.

struggling paycheck to paycheck

How to Handle the Small Business Economy

Small businesses are subject to the whims of the economy. The relationship, however, isn’t always clear. The economy being on the rise doesn’t necessarily mean that small businesses feel the benefit. However, knowing what to do to prepare for an economic boom can keep your business afloat and above the competition.

Unretirement: The Secret of a New Workforce

unretirement

I have a term for you that you will start hearing more and more over the next few years: unretirement. The title explains itself really, with the idea being that retirement is no longer a necessity. Now, you can keep your small business expanding beyond what you may have thought possible in the past, staying in charge past when people may see you as “expired.” Because why stop doing what you love because of something as arbitrary as age?

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

What Is “Unretirement?” Exactly?

As I’ve gotten older, that evil ‘R’ word kept creeping closer. I spent a lifetime of gaining knowledge. Am I to toss that away and sit in a home and wait to kick it? No, I don’t accept that. So, instead of thinking about retirement, I started to think about unretirement. My little 5-foot tall Italian grandmother worked with her sisters until she was 90. It gave her purpose. So, I used her as a model and started ProStrategix. 

The amazing thing was I’m not alone. Listening to an interview with Chris Farrell from NPR’s Marketplace was really eye-opening to me. 

It is time to shift the conversation about aging away from Social Security, retirement, physical decline, and an economic crisis, [and] focus on boosting the odds of healthy, active, and purposeful aging through working longer- including launching an entrepreneurial venture. Older minds who are involved in a community are happier.

Chris Farrell, interviewed on the Small Business Radio Show

So. What to do with this information?

Bam, Unretirement – A Whole New Workforce 

If a small business was willing to look past the stereotypes, this could be a real opportunity to access experienced workers. Age discrimination is a real issue, and people who want to work are often not hired at large companies. Think about it. Since when have you had someone with 20 or 30 years of experience in your market want to work at a small business, knowing it comes with a smaller salary? I bet the answer is never.  

It is a talent pool that is underutilized and underserved. So let’s think about ways to change that and to expand both your employee base and audience.

Unretirement – A Whole New Set of Entrepreneurs 

I was amazed by the statistic Mr. Farrell shared. 

For the first time, 25% of all business are started by people who are 55 to 64 years old. These older entrepreneurs are turning their passion into a business. What is different for these people is that many of these new entrepreneurs start to focus on a business with a purpose rather than just earning more money. 

Farrell, SBRS

Speaking as a Gen X’er, I know that I can be a little cynical when it comes to baby-boomers. However, it seems that they and I are sharing the same goal: work because you like it, not just because you need to. So let’s embrace these new employees for your market.

Working Longer May Keep Us Happier 

As we live longer, the traditional model for retirement really doesn’t make sense. We should embrace the idea of unretirement. Age has value if the aged are willing to learn and adapt. When I think back to my grandmother, who was born in 1914 and died in 2014, I am amazed at how much change she experienced. But in the end, she managed to evolve and adapt. If she could do it, why can’t we? 

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

We Use Gig Workers. Why You Could Too

gig worker

As opposed to long-term and retained talent, gig workers provider short-term support when you need it. These workers are key to enabling us to effectively delegate. Consequently, we can focus most on building our business. If you are not tapping into the gig workforce, you should. Delegation is critical in any small business, no matter the size. Embracing a different kind of workforce could really help you in the long run.

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Small Business Owners Tend to Take on Too Much

The payroll provider OnPay states small business owners spend almost 40 hours a month on HR and payroll. That’s a full workweek. And that’s just one (important) example. If you are spending so much time running the business, when is there time left for what you want to do? A gig worker could help. Referring again to our post on Pain-Free Delegation, we need to look at our list of what we can delegate and how. That way, you can see where you need the most help.

Gig Workers Can Do What You Hate

What you hate to do the most? Because let’s face it, there’s always a task that you put off until the last possible second. I have gig workers do my extra jobs; could a gig worker help you?

For many of our clients, it’s their books. They just hate it. Luckily, this is one area where the gig workers can help. There are plenty of reputable accountants and bookkeepers who can help. If you are in the New York City Metro Area, we can happily recommend some.

The key is to find what you consider a chore and see if there is a gig worker who can help. Often, they’re waiting in line happy to help.

Gig Workers Can Do What Don’t You Know

Here you need to be brutally honest with yourself. While we tend to think we can learn anything, there is a difference between the ability to learn something and whether you should learning it.

For us, it was social media. I know it. I’m functional in it. I know I could become an expert in it. However, I chose a gig worker for it because my time was better spent building the business. There were hundreds of great candidates that knew more than I did. Thus, frankly, it didn’t make sense for me to invest my time to become as good as they are.

For many small business owners, they are missing some of the key business skills. Maybe it is accounting, marketing, finance, etc.? It’s not worth your time in learning all these skills when there are a ton of gig workers who can help.

How do you access the quality of skill you don’t have? It’s tough, but most gig worker websites now have competency tests that can help. In our post, “How to Learn More About Business for Free”, we also provide a few resources you can tap into which can help.

Ok, You’re Not Picasso

Not everyone is a talented artist or a great writer. Here’s another area where gig workers can help. Professional headshot for LinkedIn. Videographers for short-branded videos. Web Design…the list goes on and on.

Finding gig workers for these tasks are relatively easy. Sites like Thumbtack, Fivver, etc. have plenty of willing workers. It may cost more than a DIY project, but do you want your Brand to look like a DIY project? For more creative types, DIY is more than sufficient. For others, it’s likely not. It’s about being honest with yourself.

In summary, the most important resource you have as a small business owner is time. Be wise how you use it.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

The Secret to Attract & Retain Small Business Talent is Revealed

Attract-Retail-Business-Talent

In our post, “3 Ways to Get the Best Talent More Often”, we cover how to recruit talent. In this post, we reveal the secret of how to attract and retain talent in your small business.

While small businesses can’t hold concerts, have a free cafeteria, or other major perks, we can be as creative and personalized as we want. And, that’s the secret to attract and retain talent. What keeps people motivated and dedicated is not their salary, but the intangibles. Luckily, as a small business, we can be flexible. Because we can be flexible, we provide our employees with benefits tailored specifically to their needs. This can be an asset in attracting and retaining talent. Let’s go through a few examples. 

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a FREE thirty-minute consulting session. 

First, Use Location Flexibility to Attract & Retain Talent as a Small Business

While some jobs require employees to physically be at one location, others don’t. Therefore, for those positions, offering location and time flexibility can be a great way to attract and retain talent. Why? It’s because people can choose when and where to work so that they fit their lives. Normally your work schedule dominates your life. But, in this case, your life guides your work. It’s an incredible perk. For instance, it’s very attractive to working families where childcare is an issue. Therefore, ask them when it is important to be in the office. If they can get their job done from home part of the time, let them. 

Second, Build a Team Where Everyone Feels Valued

Remember the team picnic or barbecue? Simple things with events and food can be powerful tools.  These can ensure that people feel bonded. Humans are social creatures. As a result, relationships are one of the most powerful tools to attract and retain talent, especially in small business. It doesn’t need to be a big event, just something your employees would enjoy. Ask for opinions and involve the team in planning it. It not only helps the inner workings of the business, but helps the company grow as well

Third, Attract & Retain Talent as a Small Business by Not Setting Hours

One of our key tools to attract and retain talent is providing work-time flexibility. For instance, we allow our team to set their own hours. It takes some time to adjust. You still need to set fixed times to review progress, like how we have weekly calls at a fixed time. During the call, each employee reviews their weekly status report with their manager. Businesses waste time, brainpower, and creativity by strapping people to a desk for 8 hours a day. 

Finally, Get Creative

Importantly, take the time to get to know your employees. Because by getting to know them, you can uncover what they value. And, what they value, likely others like them will value. Thus, it starts to build a self-sustaining culture. If you will want to delegate to your employees, it is helpful to make sure they like the environment they all work in. Importantly, it makes it someplace people want to work. In other words, that’s the true secret to attract and retain the talent you want. For even more information, Forbes has a number of great articles on attracting & retaining business talent, but for a more personal touch, come to us  

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us. 

A Simple Way to Classify Workers in Small Business

classify workers

There’s a battle waging regarding how to classify workers in small business.  The Gig economy has significantly blurred the lines between the definitions of employees versus independent contractors.  This blurring has started a war between business owners and the States’ Department of Treasury or Taxation. It’s a very important job to set up correctly.

That question matters to your small business because there’s a war going on over the question of “employee status.”  Whether you’re a gig worker, service provider, consultant, or one of the hundreds of other kinds of self-employed entrepreneurs – or you hire those kinds of workers – you’re a soldier in this war.

USA Today

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

What’s the big deal?

How you classify your workers in your small business impacts the taxes you pay.  Employees and employers are subject to employment taxes and withholding.  Employees are also subject to a number of state regulations and laws, such as family leave, sick time, etc.  In contrast, employers of contractors are not.  Employers are required to file a form at the end of the year for each contractor.  After which, the employer’s tax obligations end.  So, it is easy to see the appeal to small business employers.

What’s the catch?

If this is such a great deal to employers, you might ask, why don’t we classify all small business workers as contractors?  Some companies, like Uber try, but here’s the catch.  The biggest losers in this war are the States, and they’re not happy about it. 

Contractors have to pay their own Federal and State Income taxes but are not subject to paying into workman’s compensation, unemployment, and other state employment taxes.  The Federal Government is getting its money, so the IRS isn’t the agency you need to worry about.  It’s the States. They are losing millions in lost revenue to their workman’s compensation and unemployment funds. So, they are furious. Therefore, they have been very aggressive in challenging how small business workers are classified.

Why should you care?

If a State deems that you are misclassifying your workers in your small business, they will bill you for the back taxes. Also, these taxes also come with some hefty fines.  The burden is on you to prove the state is wrong.  So, unless you have a staff of lawyers on hand like Uber, it’s a costly and time-consuming battle. Thus, you could stand to owe your back taxes, but also your lawyer’s fees, etc.

A simple hack to help with classifying your small business workers

While this is a very grey area in the law, as a fellow businessman, I tell my clients to follow this simple rule: If YOU direct the work, play it safe. Classify the worker as an employee (W2).  Conversely, if THEY tell you how they will do the work, they are more likely a true contractor. 

The easiest way to avoid misclassify workers in your small business is to clearly have a statement of work (SOW) from the contractor prior to the job.  The purpose of the SOW is to have the contractor specify his or her methods, timing, and check-in points. The important distinction is that the contractor through the SOW specifies how and when the work is done, not the contractee.  The contractee can agree or disagree on terms, but once signed, it’s set.  Contracts can be altered, but there is a clear paper trail when changes are made. 

This is not a foolproof method, but it does reduce your risk of getting tripped up in this grey area.  We have some tools that can help. Ultimately, if you have any specific concerns about your own business, you should probably seek the advice of your attorney.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

The Hidden Risk in Playing it too Safe with Hiring

too-safe-with-hiring

One of the most important ways to expand your business and take it that next step is to get the right talent to join your company. Are you playing it too safe with hiring?  How do you know?  After the last recession, small business owners have been reluctant to hire according to a U.S. Chamber of Commerce study. 

A U.S. Chamber of Commerce-MetLife survey released last week found that 28% of small businesses plan to increase their staffs in the next year, down slightly from 29% in the first quarter… A bleaker view of small business hiring came from payroll provider ADP, which earlier this month reported that companies reduced their staffs in May… Small business owners have been conservative about hiring since the recession.

Associated Press

Don’t let yourself fall behind by playing it too safe, and read on to know about how and when to add to your team.  

Unsure of how to take your business from good to great? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a FREE thirty-minute consulting session. 

You may be playing it too safe with hiring if:

First, you’re waiting for growth to hit until you hire

In our blog post “If You Don’t Plan for Growth Now, You’ll Hate Yourself Later”, we cover the reasons why waiting for growth creates more headaches than smartly managing and anticipating it.  It’s like tending a plant.  If you don’t add water until the leaves start to wilt, then it won’t grow as well as when you water it regularly.

Second, you or your employees are exhibiting burnout

According to a recent Gallup poll, 2 out of every 3 people feel burned out at their job.  1 in 4 is very often or always burned out.  Why?  Their companies are playing too safe with hiring.  They are understaffed and overworked.  In that environment, productivity falls, mistakes happen, and customer service plummets.

Lastly, customers are complaining or waiting too long

One outcome of our 24/7 always connected world, it’s no longer just New Yorkers who are impatient.  Customers have become more demanding.  They have become used to fast and easy service.  If you aren’t able to provide it, they will go elsewhere.  This is one of the key symptoms of waiting too long to hire.

How not to play it too safe with hiring:

First, know what drives your demand so you can plan on when to hire

It’s important to know what factors drive demand so you can predict it. This will help you ensure that you have the right team in place to handle it, and you are investing wisely in anticipating growth.

Second, know where the inefficiencies lie

It’s not just important to know how you drive sales, but also the cost it takes to service it.  If an increase in demand would cause you to have to pay overtime, then it might be time to bring another person onboard.

Lastly, not to play it too safe with hiring, you must invest

This last point is key, and it’s the scariest part.  If you don’t want to play it too safe with hiring, you often must spend the money before you see the reward.  Investing wisely in people, business processes, and business systems can ensure that you have the right people in the right roles at the right time.  It can also ensure that you are efficiently driving demand so that accelerating growth leads to accelerating profits. 

Hiring can be a cause of stress.  That’s why it’s often wise to get help, so you avoid playing it too safe with hiring.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

3 Ways to Get the Best Talent More Often

Best Talent More Often

Small businesses often struggle to get the best talent. Talent is the most value asset that businesses have.

The most valuable assets of a 20th-century company were its production equipment. The most valuable asset of a 21st-century…will be its workers, and their knowledge & productivity.

Peter Drucker

So, how can small businesses get the best talent more often? Certainly, they aren’t likely to win on salary. Therefore, we need to use our size to our advantage. We modified the tips in Dave Kerpen‘s article in Inc magazine so that they are more relevant to small businesses.

Here are the three ways that you can help you get the best talent more often.

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

First, Get Creative With Compensation

Small businesses can win with the intangibles. While compensation is important, the intangibles can be even more valued. Growth potential and the ability to make a difference can be even more motivating than salary.

Money cannot provide fulfillment. But, the intangibles can. Thus, if you want to get the best talent more often, focus on the intangibles.

Second, Offer Unique Benefits

Small business can’t afford to offer generous benefit packages. But, they can offer more personalized ones. These can be even more valued.

Large businesses are stuck. They have to offer a one-size-fits-all benefit package. Small businesses do not. We can use this to our advantage. Personalized benefits can make us stand out. They can help us get the best talent more often.

Lastly, Be Flexible with Workplace Location and Schedule

Importantly, don’t lose sight of work-life balance. It is one of the key reasons people leave their jobs. Certainly, this is an area where small businesses have a distinct advantage. We can leverage technology to provide flexibility in both hours and location. Therefore, this can be a powerful differentiator that can help us get the best talent more often.

Finally, as Mr. Drucker says, talent is the most valuable asset a company has. Therefore, talent is key in any business model or plan.  As a result, if you are concerned that you are not getting the best talent more often, ask us about our free business assessment to see if we can help.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.