Hiring Headaches

By most of the typical metrics, 2025 was an employer’s job market. The Bureau of Labor Statistics reported that the overall hiring rate has hovered around 3.5% for the past year – a level associated much more with times of economic downturn than a steadily growing GDP. Turnover at small employers has reached a decade-long low, according to ADP Research. Monthly job growth has almost exclusively been carried by jobs added in the healthcare sector, and with companies not hiring, recent college graduates seeking entry-level positions face a particular challenge with finding jobs.

And yet, the percentage of suppliers reporting hiring woes is back up after its notable dip in 2024. Three-quarters of suppliers reported being at least slightly concerned about both hiring qualified workers and retaining their best employees. And 1 in 10 said that they expected labor to be their most difficult challenge in 2026, more than common difficulties like maintaining quality without raising prices or retaining customers.

Yes, finding – and keeping – good workers is certainly easier than it was in the immediate aftermath of the pandemic, when employees quit in droves during the so-called “Great Resignation.” But many suppliers note that employees just entering the workforce may not have the same career preferences as many long-standing manufacturers’ most tenured employees. Hourly warehouse, production or decoration jobs don’t offer the flexibility of remote or hybrid work, for example, the same way an office job can.

And perhaps the biggest advance of modern technology may also be a hindrance for companies. Artificial intelligence and auto-apply tools on sites like LinkedIn have made it easy for people desperate for a new position to mass apply to anything and everything, without as much regard for specialization, meaning that employers are left to navigate a deluge of applications from workers without any relevant experience.

“We would post an ad that we were looking for a position,” says Josh Goodelman, president of Liqui-Mark (asi/67675). “And we would get people applying that had no experience in that world. It could be very overwhelming as the employer trying to sort through it all.”

The advantage of the current hiring market, though, is that companies can afford to be pickier about who they’re bringing on. There are more people looking for work than there have been in recent years, and salaries don’t have to be quite as competitive as in previous years to attract applicants from the wider pool. Despite the challenges of weeding through applications, Goodelman says Liqui-Mark has the most consistent, reliable staff the company has had in years.

Rather than relying on general, widespread job ads, Goodelman has had better luck subscribing to resume database search platforms or utilizing a staffing agency in order to ensure more control over the applicant pool. “It’s easier to identify people that you want to talk to before they have to identify you,” adds Jeff Roberts, CEO of iClick (asi/62124).

To staff iClick’s warehouses, the team typically hires temp employees first, then extends permanent offers to successful workers after 90 days. Outside of these staffing tools, relying on referrals – for both office and sales positions and warehouse staff – has become more essential than ever, Roberts says.

“A friend of a friend is the best employment agency you can have,” agrees Mike Levy, president of supplier Compass Industries (asi/46170).

Suppliers will prioritize different personality traits when identifying top-tier applicants. Roberts prefers employees with a demonstrated curiosity for how and why things are done – it’s a signal that they’ll be focused on how to improve as they progress, he says. Other suppliers target applicants with proven longevity in their employment history as a testament to company loyalty.

Dan Oas, CEO at Counselor Top 40 supplier High Caliber Line (asi/43442), doesn’t even move people to the interview stage of the hiring process unless they score well on the personality index the company includes as part of its initial applications – think someone detail-oriented or more introverted for a quality control role versus someone a bit more sociable for a customer-facing support job.

“It cuts through the clutter that way,” Oas says. That strategy rarely steers him wrong, and employee retention among the hires he made with that process in place has been excellent.

Regardless of position, though, Dan Frank says that the ultimate best strategy for recruitment and retention is to start wages high and build a workplace that rewards productivity. At Reno, NV-based Silverscreen Decoration & Fulfillment (asi/87316), Frank has a metric to track worker productivity and implements near-immediate raises when he notes employees with significant improvements. In turn, the practice helps minimize turnover, which is especially helpful in a more specialized trade like decoration that typically requires workers to learn on the job.

Labor costs tend to not be a concern, he says, because the revenue benefits of better workers and increased employee longevity more than compensate for any additional costs associated with higher wages. In the seven years Frank has owned Silverscreen, he’s roughly tripled the size of his staff – but his revenue has increased by tenfold in that same span, and he’s never had trouble finding hardworking people who want to learn the trade.

“If their productivity measurement goes up, we immediately increase their pay – we have plenty of people at more than $20 an hour,” Frank says. “If you can get three people starting at $15 an hour versus two people at $18 that will eventually move up in the company, you’re getting a better ROI.”