How to compete for top talent in a tight labor market

With unemployment at near-historic lows, finding the right workers for open positions is a struggle for many companies. The challenge is particularly acute for smaller firms: Nearly 1 in 5 have open positions that have gone unfilled for at least three months, while more than half have offered higher wages to attract qualified workers, a recent CNBC/Survey Monkey poll revealed.

Winning top talent in such a tight market takes a strategic and multifaceted approach. Consider these six tactics to gain a competitive edge:

Search for passive candidates

Many people who are not actively looking for a job are still open to new opportunities, according to LinkedIn. Social media is a good channel for unearthing these potential hires. For example, you can search LinkedIn for specific job titles or keywords and filter by location. Matches who are connected to people in your network will appear highest, so you could ask these connections for an introduction. Regardless of how you make contact, explain to the person how you found him or her, and what specifics in their profile made you want to reach out.

Depending on your business and industry, other websites may also help in your recruiting efforts:

• Twitter: Search for users whose profiles or feeds include hashtags or terms related to your industry. For example, if you're looking for a sales specialist, you might search for that term or something more specific, such as "advertising sales" or "sports equipment sales." This approach is most useful for companies with an active Twitter feed and strong follower base, as these lend credibility to a company.
• A résumé database: Use the résumé search feature on sites such as Indeed, Monster, and ZipRecruiter to find candidates whose skills and backgrounds match what you are looking for. You can search résumés by keywords, location, years of experience, and other criteria. You will need to create a profile and, in some cases, purchase a subscription to access candidates' names and contact them.

Tap your network

Your employees, partners, and other business connections can be a great source of referrals for new talent. They may have a good sense of cultural fit — and, research shows that hires resulting from those referrals could be more productive and engaged. When you ask for referrals, be clear on what you're looking for — specify the skills that the role will require, what responsibilities it will entail, and the position's level of seniority. Consider offering an incentive for referrals from employees that result in new hires, such as a small cash bonus or extra vacation days.

Keep an open mind

Not every great employee checks all the desirable boxes. You might find someone that meets most of a role's requirements, but not all. Consider providing training in these gap areas. For example, if a good candidate for an office manager position at your company lacks the level of vendor management experience you're looking for, you might work closely in this area in the beginning until he or she gets up to speed. This approach can pay off — not only could it net you a great employee, but the investment in training could foster loyalty.

Consider recent graduates

Hiring newly minted college grads, when appropriate, can save you money on the salary a seasoned professional would require, and it can come with other advantages. These hires might also be well-versed in new technologies and able to bring fresh approaches to certain tasks. Contact the career centers at schools near you: Many universities offer employers opportunities to connect with qualified graduates or soon-to-be grads through career fairs, online job boards, and other sources. In your outreach, emphasize growth and advancement opportunities that working at your business can offer. These opportunities are grads' No. 1 consideration when looking for a job, research from staffing consulting firm Robert Half found.

Provide work-life balance

Attracting the best candidates requires offering not only interesting, rewarding work, but also an appealing work environment. Good work-life balance is a big part of this — and it's an area where small businesses may be able to match larger ones. Perks such as more flexible hours, more vacation time, and work-from-home options rank highly on employee surveys, and may cost little to implement. Think about what makes sense for your company. It may be fairly easy to provide a work-from-home option once a week, or half-day Fridays during slower parts of the year.

Be decisive

When you find candidates you're interested in, be prepared to act quickly, since strong candidates may be weighing multiple offers. Try to keep to a strict timeline for reviewing résumés, conducting interviews, and making an offer. Keep candidates informed about where you are in the process —proactive updates let candidates know that you're interested. Even if you don't end up hiring a particular candidate, clear communication throughout the process can give a favorable impression of your business.

The Bottom Line

In a competitive labor market, every step you take to attract top talent matters. Citizens can help by offering retirement plan options for businesses and personalized financial guidance for employees. Call 1-800-428-7463 or stop by your nearest Citizens branch to learn more.