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How to Hire in a Tight Labor Market? Smart Strategies


Hiring in a tight labor market can be hard, especially if you’re looking for employees who will get the job done right.

Fortunately, we have some experience in this area and can teach you a thing or two about overcoming the challenges when searching for your next hiree.

Tight Labor MarketBy the end of this article, you’ll be a pro at recruiting even in the tightest of markets. Let’s get right into it.

What is a tight labor market?

Before we get into the tips for hiring in a tight labor market, we’re going to give you a brief summary of what that term actually means. After all, it would be rather detrimental to go straight into tips without first explaining the base concept.

To put it simply, a tight labor market describes an economy that’s close to full employment. This tends to drive wages up and makes it rather difficult for recruiters to find viable candidates. Tradesmen are a great example of this effect.

Occupations like plumbing, electricians, and carpentry used to be common, but with the transition to more office-centric jobs, these skills have become rarer and thus the prices for such services have risen considerably in the past few years.

Low unemployment rates are actually good for a country’s economy, but they can be a nightmare when trying to fill vacancies. The following tips should help you defeat the obstacles of such a scenario though.

10 Smart Strategies for Hiring in a Tight Labor Market

1) Pay more:

While it’s not ideal, there are some instances where the only way to get a suitable candidate in a tight labor market is to pay them more.

This will drive up the operating costs of your business but it’s better than being understaffed for months or even years. When the supply of available workers drops, they essentially become a commodity — and the company with the highest bid will take the prize home.

We know that paying more is the last thing you want to do, but you’d be surprised how quickly you’ll get new applicants once you give the salary a nice bump. You should try a few other things before resorting to paying more, but if all else fails, it beats having vacancies.

2) Broaden your horizons:

If you’re trying to hire in a tight labor market then you don’t have the luxury of setting stringent criteria. Make concessions on the education level, experience, and/or gender to get more applicants flowing in.

Even if you’re hiring for a male-dominated role, don’t ignore half of the human population — especially in times of scarcity.

During the second world war, baseball leagues hired female players to keep the show going while the men were at the front lines. A lot can be learned from this era when it comes to broadening your horizons when the talent pool gets shallower.

Opening the floodgates to those without a college degree can also help you find more candidates during tight labor conditions.

A piece of paper isn’t the only signifier of knowledge. Leonardo Da Vinci was an autodidact, as was Abraham Lincoln, yet they’re still two iconic and intelligent men of American history.

3) Remote hiring:

If the tight labor market is limited to your region or country rather than the world as a whole — as in most cases — then you can start hiring remotely to fill positions.

The stereotype that remote workers aren’t as good as office employees and spend their hours slacking off is inaccurate, to say the least. In fact, some remote workers can even be more productive than office workers since they don’t have to waste time on a daily commute.

When you hire remotely, you’ll have access to workers from all around the world. Of course, this is better for some positions more than others.

If you’re hiring a marketer then getting a remote employee from halfway around the world won’t be an issue, but you can’t exactly get a remote plumber to serve your local clients.

That being said, even if you need your employees to be physically present, you could still hire remotely then offer relocation upon finding the right candidate.

With the current state of geopolitics, there are countless skilled workers who would jump at the opportunity to leave their country that may be ravaged by war, famine, poverty, or disease.

4) Hire young:

When trying to hire in a tight labor market, hiring younger candidates is often the best way to go. You might be worried that their lack of experience will pose an issue, but they can usually overcome this with some training and time.

Older and more experienced workers in tight labor markets are either already working for another company or would expect an exuberant paycheck from you at the end of each month.

When you hire younger candidates, you won’t have to pay as much and will generally find employees that are more loyal as well.

Most people — who have morals — tend to stick to their first employer for quite some time as they are grateful that the employer gave them their start in the industry.

Getting candidates that are right out of college or even high school will not only save you money but also give you the opportunity to grow a quality employee from the ground up.

5) Video interviews:

Unemployed workers in tight labor markets have a wide variety of options available to them. That being the case, it can be hard to persuade them to come to your office for a job interview.

The best way to get past this challenge is by conducting video interviews with interested applicants instead. They won’t have to spend as much time nor money just to be interviewed and thus you’ll get more candidates going for the position.

This also saves you time since you won’t have to wait around for applicants who got stuck in traffic on the way to your office. Skype is generally the gold standard for business video calls but other options like Messenger or Zoom are also good picks.

Diamond insight: make it easier for people to apply and it will be easier for you to hire.

6) Seek help:

Hiring in a tight labor market and defeating alcoholism have one thing in common — you need to seek help if you hope to succeed. Getting help from your existing employees can make it much easier to find good candidates for a position when workers are in short supply.

Most companies offer a financial incentive (such as a cash bonus or even sometimes a pay raise) to their employees who help them fill vacant positions.

This is more common in online businesses but it has been on the rise in office settings as well due to the occurrence of tight labor markets.

While you’ll have to pay more due to these bonuses, you could actually save money since you won’t have to spend as much time and resources hunting down candidates under scarce conditions.

7) Work on branding:

If you want your company to stand out as a top choice in tight labor markets then you should step your branding game up.

You could make an exact replica of Coca-Cola with the very same formula and sell it for half the price but people would still buy the original because of the strong branding behind it.

Even under tight labor conditions, companies like Apple or Google never struggle to fill positions because their branding has ensured that they’ll always have a steady stream of applicants.

Make your company a prestigious and sought-after place to work at so that the applicants passively come to you — rather than you actively hunting them down. All you need to do is build your brand and you’ll never have to worry about recruitment again.

8) Recruit minorities:

Studies show that minorities have higher unemployment rates than Caucasian workers. You should capitalize on this by looking for applicants in minorities. If you limit all positions to Caucasians then you shouldn’t be surprised when you run out of candidates to assess.

There are some companies who outright refuse to hire any minorities, so use this to your advantage and tap into the employee pools that they’re neglecting.

Tight labor markets can make hiring hard, but opening the doors of your business to employees of all races will make it easier to fill positions. You’ll even improve upon your company image by having a diverse workforce — making it a win-win scenario.

9) Leverage social media:

In tight labor markets, your best bet will be hiring from younger demographics. As such, you should modernize your hiring strategy by incorporating social media.

Research shows that the average person spends over two and a half hours on social media — every single day. That’s far more time than people spend looking at billboards or reading the classified ads.

If you’re trying to counteract the obstacles of a tight labor market by capitalizing on the fresh grad or even undergrad pool of workers then platforms like Facebook and LinkedIn can make your life a whole lot easier.

In fact, Facebook even has a tool known as Facebook Jobs developed specifically to help companies hire employees through the platform. Some companies have even taken things to the next level by tweeting out vacancies or looking for new employees on Instagram.

10) Benefits, benefits, and more benefits:

Landing — and more importantly, retaining — employees in tight labor markets can be a Herculean task at times. That being said, if there’s one thing that makes it a whole lot easier, it’s benefits.

Many companies widen the healthcare coverage of their employees during times of desperation when the labor market gets too tight to fill any vacancies.

With the volatile and uncertain state of federal healthcare, an employer offering wide coverage is becoming increasingly appealing to new recruits. Not only will it help you find more applicants but it will also ensure that the candidates you hire actually stay long-term.

During recessions, most people will take any job they can get. Tight labor markets are the polar opposite of a recession scenario and thus you need to ensure that working at your company is very appealing if you hope to stay fully staffed.

A strong 401k offering can also draw in more candidates as it’s beneficial in the long run rather than just being a fun perk like extra vacation days. Humans are notoriously bad at saving for retirement and, as such, the appeal of 401ks is increasing at a rapid pace.

When to Use a Recruitment Agency

If you’re trying to hire new employees in a tight labor market and fill vacant positions then you might’ve considered enlisting the help of a recruitment agency.

There are some scenarios where this is a good idea, but it’s not always the best course of action. Before outsourcing the work to an agency, consider some of the elements below.

1) Volume and frequency:

The first thing that you should look at when deciding whether or not you need a recruitment agency is the volume and frequency at which you hire new employees.

If you only recruit whenever a position becomes vacant — perhaps because an employee was fired or quit — then having in-house staff in charge of scouting out new talent isn’t necessary and will just be a waste of money.

You could easily use a recruitment agency to fill the occasional void if your hiring needs are this sparse. If you hire more often then it could be more efficient to have in-house staff handle everything rather than outsourcing to a recruitment agency.

This is only true to a certain point though. If you’re hiring in bulk and perhaps even internationally then it will be hard to fill positions without the help of a recruitment agency.

It all comes down to how often you hire, how many positions you need to fill, and whether or not you can justify the cost of getting help from a recruitment agency.

2) Costs:

Speaking of costs, you should take a close look at how much money you’ll actually be spending by outsourcing the work to a recruitment agency.

If you’re trying to fill an executive position in a tight labor market then you’ll likely be retaining the services of a recruitment agency — meaning you’ll pay them upfront and give exclusive rights to fill the position.

This is rather rare if you’re filling mid-tier positions though thus most of your dealings with recruitment agencies will be on a contingency basis meaning that they only get paid after successfully filling the position.

In other words, you won’t incur any costs until they actually get the job done — and at that point, it’s worth it. Outside of executive hiring, working with recruitment agencies is relatively affordable.

3) Urgency:

The last factor to consider before deciding to work with a recruitment agency is how urgently you need to fill the position.

If the vacant position isn’t very essential and you won’t encounter any problems by taking your time to fill it then you don’t have to get help from a recruitment agency. You could simply post online and wait until a suitable applicant comes in.

This might take a while in tight labor markets, but if there’s no rush then why not wait. In contrast, if the vacancy is impeding your business operations then enlisting the services of a recruitment agency to fill the position as soon as possible can be a net positive in the long run.


While it may seem like it at times, tight labor markets aren’t the end of the world. You can still hire the right candidates if you use some of the tips that we’ve covered in the above sections.

Use modern strategies, broaden your horizons, and don’t get caught up on trivial details like what degree an applicant got in college. As the old adage goes, beggars can’t be choosers.

Making the application process easier through the use of video interviews and online forms can also get you more leads. If all else fails then either offer a higher salary or get help from a recruitment agency since it’s literally their job to fill positions.

If this article helped you overcome some of the obstacles associated with hiring in a tight labor market then be sure to pay it forward by sharing the piece with a friend or two. Who knows, it just might help them find their next loyal employee too. That’s all for now and happy hiring!

Author bio: Olga Mykhoparkina is a Chief Marketing Officer at Chanty a simple AI-powered team chat. This powerful and free Slack alternative is aimed to increase team productivity and improve communication at work. Having a 9-year experience in digital marketing field, Olga is responsible for Chanty’s online presence strategy, managing an amazing team of marketing experts and getting things done to change the way teams communicate and collaborate. Follow Olga on Twitter or feel free to connect on LinkedIn