Raising entry-level wages to $15 an hour, offering new benefits and pouring time and resources into recruiting are among the strategies Northwest Arkansas small business owners have tried to attract employees in recent months. Despite their efforts, many are struggling to fill open positions and keep their businesses running amid an ongoing labor crisis.
Fifty-one percent of small business owners nationwide reported job openings they were unable to fill in September, a 48-year record high for the third straight month, according to the National Federation of Independent Business, a small business trade and lobbying group. The rate of owners expecting better business conditions over the next six months decreased by five points in September to its lowest level since 2012.
Although the labor shortage has hit some fields harder than others, nearly all areas of American business have been impacted. Joe Serrano owns eight Supercuts franchises across Arkansas Prior to the pandemic, he owned 10, but he had to close down one in Fayetteville and one in Rogers when he reopened his Arkansas salons in September 2020 following a six-month closure.
Despite offering a $12 hourly wage, supplemented with commissions and tips, in addition to health insurance and paid time off, not enough employees were willing to return to work and Serrano had to shutter the locations. A few stylists quit because of the mask mandate for Arkansas salon workers at the time, but most stayed out of the workforce, Serrano said. The remaining franchises have had staffing shortages and high turnover since.
“We have a bunch of people that apply on our Indeed (website), (for) which we're paying $5 to $15 a day, just trying to get stylists,” Serrano said. “We have people that apply but the phone numbers or emails they leave down are invalid. I started asking my people, ‘Why are people doing that?’ They're like, ‘Well, as long as you can show unemployment that you are actually looking for a job, you can still collect unemployment.”
Autumn Trout, the franchise owner of the Little Gym of Rogers, has had similar problems keeping her children’s gymnastics facility staffed, despite raising wages from $11 to $15 per hour and offering bonuses to entice employees. In October, Trout widely disseminated the gym’s online job postings, and 30 people applied. Only two showed up for their scheduled interviews, Trout said.
Trout and her husband have been doing their best to fill in the gaps by working overtime to keep the gym open, she said.
“It's incredibly stressful,” Trout said. “My husband and I own this business, we're trying to expand and open more locations, but we don't want to do that until we know we can staff them.”
During one week, Trout and her husband were unable to be home together with their children a single night, she said.
“I think it takes a toll on them,” Trout said. “It takes a toll on us.”
For JD Huddleston, owner of Concrete Creations and Excavations, it has been almost impossible to find enough qualified laborers to staff his construction crews since the pandemic began. To be able to complete his contracts, he has gotten creative by raising wages, offering paid vacation benefits from day one, “renting” laborers from another contractor who hires out his employees, and working on the crews himself.
“It's horrible,” Huddleston said. “I'm having to pay guys $18-$20 an hour that absolutely have no idea how to operate in my industry, just to get them to show up. And then when it's all said and done for every eight guys that I hire, I'll almost certainly have to let go seven of them within 30 days, because they're just flat out lazy.”
The understaffing has affected Huddleston’s bottom line, he said.
“I’m turning down work all the time now,” Huddleston said. “Pretty good paying jobs. Site development and stuff like that.”
The labor shortage has also impacted the ways in which Trout and Serrano do business. Like Trout, Serrano raised his employees’ wage to $15. However, both said they have had to compensate for the pay raise by raising prices on their services.
“Once people realize that we've raised our wages to $15 they're like, ‘Wow, that's that's more than I make where I'm working currently. I'm going to apply and come in,’” Serrano said. “But on the other end of that, in order to raise our wages to $15 we had to increase our haircut price.”
Four years ago, Serrano’s Arkansas franchises charged $16 for a haircut. The price is now $22.
“Stylists don't like when we raise the price of a haircut because it cuts into their tips,” Serrano said.
Trout is desperate to not only find more employees, but also to discover what is behind her and other business owners’ recent hiring struggles, she said.
“If there are people, especially college students, who are not interested in working — if they can somehow just tell everybody why, then maybe the employers would be able to kind of rearrange what we think we know to accommodate what is probably the new normal moving forward,” Trout said.
This story is part of an ongoing series about the U.S. labor shortage and its effects on Arkansans. For more special coverage, select “Where are the Workers?” under the “News” tab at the top of The Arkansas Traveler website.