 How Do Firms Respond to Hiring Difficulties?Mels de Zeeuw and Ellyn Terry No 2018-01, FRB Atlanta Community and Economic Development Discussion Paper from Federal Reserve Bank of Atlanta Abstract: Using data from the Federal Reserve Banks' 2017 Small Business Credit Survey (SBCS), this paper investigates the various ways in which different types of firms with less than 500 employees experience and address hiring difficulties, including when they decide to increase compensation. The authors find significant variation in hiring difficulties by type of firm, and a firm's response appears to depend on the nature of the problem. The most common response is to increase compensation, with firms that experience competition from other employers being the most likely to do so. Other common responses were to engage in nonproduction activities—like training and job restructuring—that may boost longer-run productivity. The results provide insight for policymakers trying to understand the linkage between compensation, labor market tightness, and productivity. Further, the variation in hiring difficulties across firm industry, education requirement, and geographic location informs economic and workforce development practitioners and policymakers working to develop targeted interventions. Keywords: small business; labor market; hiring difficulty; wages (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:fip:fedacd:99424 Ordering information: This working paper can be ordered from DOI: 10.29338/dp2018-01 Access Statistics for this paper More papers in FRB Atlanta Community and Economic Development Discussion Paper from Federal Reserve Bank of Atlanta Contact information at EDIRC. |
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