Due to the economic downturn, the job market has reversed. Just a few months ago, the biggest headache for any business owner or manager, big or small, was finding good employees. The workers ruled the roost. They demanded more benefits. They ghost the interviews. They played one employer against another. They publicly shamed their employers for their perceived bad deeds. They argued for higher wages, more protections and more flexibility.
And what could employers do if not respond in the best possible way? Many small businesses found themselves handing out higher minimum wages. Others had to come up with creative perks – like free time to care for a new dog, free haircuts and oil changes, educational funding, and prepared lunches – to keep their employees from leaving their business for a bigger competitor offering more lavish benefits. . The demand for good workers was high in a growing economy. But good workers were increasingly rare. You know what happens to the prices when this situation occurs.
But now things have changed abruptly, quickly and suddenly. The supply / demand curve has reversed. There are millions of unemployed people, and those who have their jobs keep their heads down nervously and work even harder to keep them. People who are lucky enough to get interviews show up. Employees who were quick to criticize or make public demands of their employers are now silent. They see the reality. They know they could be the next economic victim of Covid-19. They don’t want that to happen.
Of course, I’m exaggerating a bit. People work hard and deserve good pay and benefits. In the past, some companies – even in a tight labor market – have treated their employees badly and they are the ones who deserve to go out of business at times like these.
For the rest, especially small business owners who still have some cash in the bank, there is a huge opportunity. The massive labor disruption that has taken place over the past few months has freed many workers we have been looking for for years. Many smart business owners I know are looking for cheap assets and real estate deals from other more struggling business owners. But the smartest are looking for good people to hire.
But just because we’re ahead of the game doesn’t mean we need to gain an economic advantage. Now we are fortunate to find good employees and when we do it is important to treat them well. Many small business owners will see today’s Age of the Employer as a chance to take advantage of these people by paying them less or reducing their benefits. It’s a bad idea. My best clients know that treating and paying your employees well is the best long-term financial decision you can make, regardless of the current economy.