Unless you lead an exceptionally unplugged lifestyle, you’ve probably heard more than a little about the ongoing labor shortage in recent months. There’s a lot of talk about how bad things are, but what are the facts?
According to the latest data from the U.S. Chamber of Commerce, there are currently nearly 11 million job openings in the country, but only around 6 million unemployed people. That means, even if every unemployed individual was hired there would still be around 5 million positions left with no one to fill them.
Keep in mind that the unemployment rate only counts individuals who are actively seeking work. Those who’ve fallen out of the job market entirely are no longer considered unemployed by government standards. What this means is there’s potentially a large number of people who could be available for work, but aren’t actively seeking jobs right now.
This worker shortage is largely due to the Covid-19 pandemic and its impact on the entire labor force in several ways. As the pandemic raged on, some people chose an early retirement while others hesitated to return to low-paying or unfulling jobs post-lockdown. Others still, largely women, dropped out of the workforce because of the pandemic-induced lack of affordable childcare options.
Whatever the reason, the loss of such a large portion of the labor force continues to impact organizations across all industries and has had a particularly damaging effect on small businesses.
While larger companies might have the funds and resources to keep their operations running during this time, many small businesses aren’t as fortunate. The ability to afford wage increases and robust benefit packages for employees makes it more likely for larger organizations to scoop up potential hires before smaller businesses even have a chance. In fact, an overwhelming number of small business owners have cited the labor shortage as the most significant challenge they currently face.
Without the necessary help, the extra work often falls onto the shoulders of the employees who have stayed with the business as well as company owners and managers. Trying to manage such a large workload with so few people has left many business owners and their employees feeling burnt out. Some small businesses have been forced to cut back their hours of operation or even limit their available products and services due to the labor shortage. This negatively impacts the customer experience they can provide, and can ultimately drive a small business’s revenue down.
As an insurance agent, you may think you’re the furthest thing from your small business client’s mind during this challenging time but think again. The pandemic and its effects have left a lot of small business owners looking for support from their agents when it comes to understanding their policies and ensuring there are no gaps in their coverages. If you’re unsure how to support your small business clients through the labor shortage, here are four ideas to get you started.
This one is easy, just listen! Labor shortages have caused big changes in the way some small businesses choose to operate. Make sure you know where your clients stand and how their policies may need changing in order to meet their new needs. Don’t sit back and wait for them to come to you, be proactive in setting up a time to review their current coverages and address any gaps in risk management and prevention. Your clients will appreciate you reaching out and helping them check at least one item off their long list of to-dos.
Your clients may be thinking that fewer employees to take care of equals less liability to worry about. Help them understand how the labor shortage could actually be increasing their liabilities. Common areas where a talent shortage could increase risk include:
On top of that, if a labor shortage has forced any of your clients to hire lesser-skilled or underqualified workers to fill the employee gaps, they could be at risk for increased workplace accidents. Employees with less experience may be more prone to forgetting necessary safety steps and more likely to make careless errors resulting in major liability risks.
Large companies often have an advantage when it comes to offering rich and attractive employee benefits. This leads to an advantage in hiring and recruiting the talent your small business clients need just as much. But creative insurance agents and benefits brokers can help small businesses keep up.
As an independent agent, you can suggest that your clients implement better benefits and help them put options together. Work with your clients to help them learn what they can offer and what their limitations are. An enticing employee benefits package could help them attract new talent and keep their current employees from looking elsewhere.
If your clients are struggling to find full-time workers during the labor shortage, it may help to remind them of other ways the work can get done. For example, they might find more success in hiring a couple of part-time, temporary workers or outsourcing certain areas of their business. This is a great idea for clients who’re unable to afford to hire another full-time worker currently. Another way to reduce the amount of human involvement needed (as well as human error!) is to suggest your small business clients automate any manual and repetitive processes in their daily operations.
The bottom line is there are options that can help small business clients achieve their goals in creative ways, aside from simply hiring more staff. As their insurance agent, you can not only recommend some of these options, but also make sure your clients have the proper insurance they need if they try out any new methods like subcontracting, outsourcing, or automating their business.
As an insurance agent, your role is to help your small business clients manage their risk, but the support shouldn’t end there. The last two years have been tough on small businesses and offering support wherever you can shows your clients how much you care. Whether it’s something you can do as an agent to help or just a piece of advice you can pass along, your clients will appreciate knowing you have their back. In this relationship-driven business, being a true partner can go a long way toward keeping your insurance clients happy and protected.
Thanks for reading our educational resource! Any above reference to a specific company, method, or product is meant for educational purposes only and is not specifically endorsed by Pie.
