Good workers are the backbone of any successful small retail business. They serve as the face of your brand, influencing the customer experience directly. Their impact extends beyond mere transactions; they can enhance sales, and they significantly contribute to whether customers choose to return. There’s a reason people like Dana Edwards Manatos, founder of MilkShake Factory, say employees are “the core” of their business.

But right now, there are more jobs than there are people to fill them. The U.S. Chamber of Commerce’s analysis of Bureau of Labor Statistics data shows 68 available workers for every 100 open jobs. And the leisure and hospitality industry, which encompasses food-and-beverage – has the highest quit rate, at 4.3%. That leaves many retail small business owners in a bind.

In this climate, you need to get creative about how to find the best employees. Drawing from the wisdom of successful small business owners, the ICSC Small Business Center has curated advice for finding and recruiting the best talent from some of its favorite entrepreneurs.

Look Within the Special Needs Community

“One of the big problems in other businesses is turnover and lack of staff. That’s not a problem we have,” says Troy Knuckles, owner of the Aurora, Colorado, franchise of Howdy Homemade Ice Cream franchise in Colorado, which when we spoke with him employed 11 special needs workers and had a waitlist of more than 40.

Workers with disabilities have been called the largest potential group of untapped labor in the U.S. According to the Bureau of Labor Statistics, only about 21% of people with a disability in the U.S. were employed in 2022. While many are eager to join the workforce, the hiring and training processes for this group may require a tailored approach. “Be purposeful and intentional,” said Knuckles. To accommodate a range of literacy levels, for example, Knuckles incorporates visuals like pictures and numbers, rather than relying solely on words. Each ice cream item, for instance, is assigned a specific number, allowing for a more accessible ordering process. “We put numbers on the outside of the dipping cabinets for our customers to say, ‘Hey, I want No. 13,’” he said. Additionally, the point-of-sale system includes images on the keys.

These accommodations are worth it, Knuckles said. “They’re amazing workers. They love what they do, and they come in every day just ready to go. They’re always on time, and they treat your customers phenomenally well.”

And it wasn’t hard, he said, to find applicants. “It was just getting the word out in the IDD [or intellectual and developmental disability] community and letting them know what we were doing. Before long, we were, overwhelmed.”

MORE ABOUT HOWDY HOMEMADE ICE CREAM: The Benefits of Hiring People with Special Needs

Look for Niche Customers Who Could Be Employees

Your most valuable future employees could be found among your customers. Take State & Liberty, a retail apparel business with 26 retail locations from La Jolla, California, and Kansas City, Missouri, to Washington, D.C., and New York City. The brand serves men with athletic builds and resonates with current and retired professional athletes who had struggled to find well-fitted shirts, suits or jackets.

Recognizing the insights and firsthand experience these individuals could bring, founders Steven Fisher and Lee Moffie, himself a former professional hockey player, have been seeking out recently retired players as employees. The duo has gone to players association [unions] and presented their pitch. “We tell them: ‘If you’re looking to retire and looking for something to do, this is a great place to be,’” said Fisher.

Today, a large contingency of State & Liberty’s employees are former athletes. Many of them, Fisher said, “wanted something else to do and didn’t want to be in an office all day.” In turn, these employees have become some of the best recruiters themselves. They’ve seen “that there’s a lot of freedom. You can build a nice business in an area and continue to expand, build a great team, build some flexibility in your life and have a lot of fun doing it.”

This niche has “been a really good way to attract talent and people who are going to be passionate about the brand and what we’re doing,” said Fisher.

MORE ABOUT STATE & LIBERTY: State & Liberty Proves It’s Still Possible: Find Something No One Else Is Doing and Start a Business Around It

Seek Out Formerly Incarcerated People

Sometimes “you need to think out of the box,” said Oklahoma State University instructor of professional practice Tiffany Wilson. That might mean retired workers looking for extra income and activity or stay-at-home parents looking for some hours while their kids are at school. It also might mean looking for employees with criminal records who are looking for a second chance.

More than 650,000 people are released from state and federal prisons every year. The Department of Justice’s December 2021 special report Employment of Persons Released from Federal Prison in 2010 found that 33% did not find work in the four years following their releases, and Prison Policy Initiative’s Out of Prison & Out of Work report pegged the 2018 unemployment rate for formerly incarcerated people at 27%. Those figures make this group one of the largest untapped labor markets.

This is a demographic that Ohio chain Hot Chicken Takeover, Indianapolis’ Indy Fresh Market and Shaker Heights, Ohio, French restaurant Edwins have targeted. “Every human being, regardless of their past, has the right to a fair and equal future,” Edwins founder Brandon Chrostowski said to a group of aged-out foster youth who were touring the facilities last year. Chrostowki himself was the recipient of a second chance. He runs not only the restaurant but also a restaurant training program for formerly incarcerated adults.

Tapping into this labor market makes good business sense. While industry estimates suggest that other restaurants grapple with turnover rates as high as 150% annually, Hot Chicken Takeover’s yearly turnover remains below 40%, founder Joe DeLoss said in an article on the Chase for Business Knowledge Center.

Pay Your Employees Well

“Quick-service restaurants don’t have a reputation for high retention or treating team members with dignity and respect, said Patrick Chamberlain, chief development officer of Hart House, a chain of quick-service, plant-based restaurants started by actor and comedian Kevin Hart. So to attract and retain employees, Hart House pays livable wages that allow employees to live in the cities where they work. “We have what we call the Hart House advantage,” said Chamberlain. “We prioritize our team members. We know that by investing in them, they will then, in turn, invest in giving a great guest experience.” The minimum starting hourly rate is $20 per hour.

The higher pay is a significant differentiator, especially in such a competitive market. According to a March 2023 study from the University of California, Berkeley, higher wages make it easier to recruit workers and retain them. And turnover rates go down.

To further distinguish itself, Hart House provides all team members with a savings account that has a 20% annual percentage yield. Employees have full access and control of the accounts. “If they’re not in the habit of saving or perhaps they haven’t set up a bank account before, we’re showing them that we’re investing in not only them, but also teaching [good] financial habits,” Chamberlain said.

MORE ABOUT HART HOUSE: How Hart House Is Scaling Up, Researching Its Target Audience and Choosing Locations

Look at Retention as the New Recruiting

Another way to deal with the labor shortage is to look at it as a retention problem instead. “We always make sure to take care of our team,” said MilkShake Factory founder and CEO Dana Edwards Manatos. “There are many companies out there where that’s not their core identity. Our commitment to our staff is what I believe draws exceptionally talented individuals to us.”

For instance, the company retained all managers during the pandemic despite state-mandated store closures. “That says a lot about who we are,” she said. MilkShake Factory also offers healthcare, vision and dental benefits, an FSA account, life insurance policies, short-term disability, long-term disability, and a 401(k) option for all their full-time corporate store employees.

With 11 locations, The Milkshake Factory also provides room for advancement. Edwards Manatos said that the majority of the leadership team have progressed through the ranks from entry-level or shift supervisor and assumed leadership roles in stores or regions throughout Pittsburgh.

This commitment to employees is something Edwards Manatos got from her great-grandmother, who founded the business in 1914. “She told me success wasn’t just learning how to make recipes and selling chocolates. It was how you cared for your employees.”

MORE ABOUT MILKSHAKE FACTORY: The Milkshake Factory’s Pivot from Seasonal to Year-Round Business Was So Successful That Now It’s Franchising

ALSO CHECK OUT: Managing Productive Retail Employees: “When You Take Care of Your People, Your People Will Take Care of You”

Develop Opportunities for Advancement

Sometimes your best future managers and leaders are already working for you. As Jordan Edwards — CEO of Mixology, a family-owned clothing boutique with 15 locations along the East Coast — explained, “We are one of the rare companies that we go out of our way to make sure that we start hiring at 14 years of age.”

To help develop talent and convince these employees to stay with Mixology after high school and college graduation, Edwards created an eight-week fashion retail leadership development program called Mix University. All Mixology junior staff are required to take the program, Edwards said. In fact, they’re paid to take it. Edwards also makes the program available for customers. “We have mothers and daughters and college students and people who are just interested in fashion purchase the class and take it,” he said.

Mix University is an eight-week program held once a week in the summer on Zoom. Each week, the class highlights a different aspect of the fashion and retail business, including buying, customer relationship management and social media operations. One goal is to help students “understand the ins and outs of how a fashion company is run and what makes it so successful,” Edwards explained. He also wants students to see Mixology as a viable career option.

The concept has worked. Since Mix University started three years ago, some of the young people who went through the program are now running departments, Including overseeing social media and managing the MixU program itself. Additionally, “we have a whole cohort of young people who have risen up and are looking develop their career at Mixology coming off the retail sales floor,” he said.

Including Rebecca Lendino, now Vice President of Mixology, who started working at the store as a high schooler.

 “When I graduated college,” Lendino said, “I went to a different executive development program. But I didn't like how corporately it was run. I didn't really love the people I worked with. And then when I came back, it was literally like a match made in heaven. It's like my missing puzzle piece, I like to say.”

MORE ABOUT MIXOLOGY: When, Why and How to Grow to Multiple Locations