Aloha, my name is Borys Rasin. I’m an immigrant from Ukraine who arrived in Hawaii in 2015 with no money, no connections, and no knowledge of English. Today, I own and run several multi-million-dollar businesses.
First, there’s Best Flooring Honolulu, a thriving flooring store that features world-renowned brands like Mohawk, Shaw, Armstrong, Karndean, Mannington, and many others. Second, I created Nroro, a brand that imports and sells flooring, wall paneling, moldings, underlayment, and various other products.
On this channel, I share my journey and offer advice to help business owners like you avoid the mistakes I made. I believe it’s better to learn from others’ experiences rather than spending your own time and resources making the same errors. By using the knowledge of others, you can get ahead of the competition. If you find my views helpful, please subscribe to my channel and like this video to support the creation of more practical content like this.
This video is the fourth in a four-part series dedicated to one of the biggest challenges business owners face in Hawaii – the labor force. In my previous videos, I discussed the conditions that make the Hawaii labor market one of the hardest places to run a business and the problems that arise from these conditions. In my last video, I shared four solutions to succeed in tough labor market conditions. In this video, I will share five more solutions to help you tackle these challenges. Here are my solutions to help business owners deal with a challenging labor market, using Hawaii as an example:
Solution 5: Transform your business so the duties you can’t find employees for can be done by people working remotely.
If your labor market is as challenging as it is in Hawaii and you’re not excited about moving people from other locations, consider adjusting duties so they can be done remotely.
Here’s what benefits this can bring:
1. It’s much easier to find employees if they can be from anywhere in the world, not just limited to the local labor market.
2. Since you can hire from other states or even countries, there’s a good chance you’ll find higher-skilled employees for less money compared to the local market.
3. You cut expenses related to having people at your location, such as electricity, working space, etc.
However, there are multiple issues that can occur:
1. Not all duties and responsibilities can be switched to remote employees. Many tasks still need to be done on-site. For example, you can’t hire a remote flooring installer unless you want them to replace flooring at their own location.
2. Hiring employees from all states or even all over the world will give you more resumes, but it will also make it harder to choose the right candidate.
3. People working remotely tend to be less accountable, and it’s harder to manage them compared to on-site employees.
4. People from other locations might not know the specifics of your market, which would lead to additional time needed for training and adaptation.
5. Often, the quality of services or duties fulfilled may decrease due to the remote location of the employee. Customers and coworkers pay more attention to someone physically present. Additionally, some things are much easier to explain and show in person than remotely.
Example:
The best example that comes to mind is the hospital I visit for annual check-ups. Many of their patients, including myself initially, don’t speak English well enough to understand the doctor. They had trouble finding translators for all languages and keeping them onsite at all times was super expensive. So, they implemented a system where they work with remote translators for the most common languages on call. When a patient requires translation assistance, the doctor calls the translator on Zoom or Skype, allowing the translator to perform their duties while being somewhere in Arizona or even in another country. Another great example is the USCIS. When I was interviewed by them, they had a similar system in place for translators.
Solution 6: Consider Partnering for Key Positions
When it’s difficult to find a good employee for a key position, taking on a partner to perform the needed duties can be a great idea. I often see small business owners in the same niche join forces, as both experience the same labor force problems. This is especially effective when each partner excels in areas where the other is lacking. For example, one partner might be a great flooring installer, while the other excels at finding leads and making sales, creating a synergy.
Possible Outcomes:
1. Motivation and Efficiency: A partner will be more motivated and efficient compared to an hourly or salaried employee, as they better understand the consequences of their work.
2. Synergy: When partners cover different areas of expertise, they create synergy. The outcome of the partnership exceeds the sum of the results they would achieve separately. Even if the pay to each partner is higher compared to an employee, the increased synergy can result in higher earnings for each.
3. Expertise: A business partner from a similar business would have much higher and broader expertise compared to an average employee for the same position.
Potential Challenges:
1. Decision Making: When two business owners become partners, it can be challenging to make decisions, as both may want to be the decision-maker. This can be resolved if one agrees to give up leadership or they agree on a system where each makes decisions on specific issues.
2. Cost: Partnering up often costs more than hiring an employee. However, this can be compensated by the synergy created.
3. Exit Strategy: If partners decide to go separate ways, it can be hard to share accomplishments achieved together unless an exit protocol was created before forming the partnership.
4. Dissatisfaction: A common problem in partnerships is when one partner believes they are contributing more than the other. This can lead to dissatisfaction and complaints, eventually causing the partnership to disband.
Example:
One of the general contractors who buys flooring from me is an exceptional example of this strategy. Initially, there were two contractors. One was excellent at sales but lacked experience working with installers and subcontractors. The other was skilled in craftsmanship but terrible with internet marketing, generating leads, and closing sales. They decided to partner up, and this led to a 10x growth from what I know. Both partners are extremely happy with each other, and I don’t think they will part ways anytime soon.
Solution 7: Consider Part-Time or Seasonal Employees
I’ve noticed that in markets with a poor labor force, like Hawaii, changing positions and responsibilities to a state where a part-time or seasonal employee can do the job can be a great solution. Here’s why:
1. Finding a part-time person is much easier than finding someone for a full-time role.
2. It costs less since most part-timers have benefits from their primary job and are willing to work with you on a W-9 basis.
3. You can access high-quality candidates who might not consider a full-time role due to their primary job commitments. With the right conditions, they could transition to full-time employees over time.
4. Many part-time candidates are highly skilled and require minimal training as they perform similar responsibilities in their primary job.
However, there are challenges:
1. Not every position and duty can be adapted for part-time work.
2. Part-time employees typically have lower commitment levels, making retention more challenging, especially when they have security from a primary job.
3. Hiring part-time or seasonal employees may lead to higher staff turnover, requiring more time and resources for training new hires.
Example:
In my business, when I changed the job description from a full-time Flooring Store Manager to a part-time role, the number of resumes I received almost doubled. The best part was hiring a highly experienced Store Manager from a much larger competitor. Although he works only 4 hours, 3 times a week, he brought invaluable expertise from his previous position. Many strategies and practices he introduced have significantly benefited my small family-run business. Currently, I’m focused on creating conditions to transition him from his current full-time role to working with us full time.
Solution 8: Consider Recruiting Employees from Competitors
Recruiting employees from your competitors is one of the oldest yet most reliable strategies in markets with labor force challenges, like Hawaii. The second hardest part is finding a suitable candidate, and the hardest part is offering them a salary, benefits, or other advantages that would entice them to switch teams. It’s obvious that offering higher-than-average salary and benefits will generate interest in your job openings. However, the challenge lies in fulfilling those promises.
Let’s explore the potential positive outcomes:
1. By hiring an employee from a competitor, you gain someone ready to perform with minimal to no training.
2. Your new employee will bring knowledge of your competitor’s strengths and weaknesses, having recently worked there.
3. Often, when employees switch to a competitor, they bring customers, vendors, technology, and other assets from their previous job.
Now, let’s discuss the disadvantages of this strategy:
1. This strategy immediately increases company expenses. It’s crucial to ensure your new employee can justify the financial investment.
2. In tight-knit markets like Hawaii, where everyone knows everyone, employees may prioritize reputation over financial benefits.
3. If an employee accepted better terms from you, there’s a risk they could accept even better terms from another competitor later on.
4. Many well-organized companies have non-compete agreements in place, preventing employees from working for competitors for a specified period after leaving their current job.
Example:
In my market, I see this strategy in action frequently due to high turnover. When I offered installation services, I often recruited installers from other companies with better salary offers. Similarly, competitors would attract my employees with more favorable terms. This dynamic is natural as everyone strives to provide for their families. Over time, I implemented contracts to protect myself, though they are more effective with office employees like salespeople or store managers rather than installers in smaller companies like mine.
Solution 9: Consider Business Types That Minimize Employee Needs
If you’re starting a business in a market with a poor labor force, like Hawaii, you might consider industries that either attract candidates naturally or require minimal employees. For instance, entertainment businesses with high tips like skydiving, party boats, party buses, and food-related ventures in tourist zones such as restaurants or food trucks typically don’t struggle with personnel shortages. While I lack direct experience in these industries, feedback from owners suggests staffing is rarely a concern. Additionally, in Hawaii where many locals are licensed realtors, businesses catering to aspiring real estate agents might find ample talent available.
On the flip side, businesses that require few or no employees can also be viable options. Examples include vending machines, laundromats, automated car washes, ATMs, and similar ventures. Let’s explore the potential benefits:
1. Operating in a niche where employees naturally want to work or that requires minimal staffing can mitigate one of the biggest challenges for any business.
2. Many businesses in these niches can be scaled with minimal personnel or even run solo with one or two assistants.
3. Avoiding the need to recruit, train, and manage employees can save significant costs, which can be reinvested into business growth or taken as profit.
However, there are potential drawbacks:
1. Almost every business eventually reaches a point where hiring employees becomes necessary to sustain or expand operations.
2. Businesses that don’t struggle with employee recruitment often face challenges in generating leads and sales.
3. The range of businesses that are highly desirable to candidates or can function with minimal staffing is limited. If you are fortunate enough to start such a business, it may have a capped income potential.
4. Even in fully automated businesses, successful growth often necessitates hiring additional staff.
It’s important to consider these factors when deciding on a business model that aligns with your goals and market conditions. Also, keep in mind, that if your business is growing, sooner or later you will need employees to service machinery even with a fully automated business.
Here are the remaining five solutions to address the challenges of Hawaii and other tough labor markets. You can use one or combine multiple suggestions to solve labor market challenges. Let me know in the comments below if you agree with the solutions I’ve provided or if you’ve used any of them yourself. If you know of more solutions, please share them in the comments. I read all of your comments and would love to hear your thoughts.
In my next video, I will share one of the reasons why Hawaii is one of the best places in the world to start a business, despite all the challenges I’ve highlighted earlier. Please like this video and subscribe to my YouTube channel to stay updated with my latest content. I will be sharing a lot of valuable information that you won’t want to miss.
See you in my next video. If you are in Hawaii right now, take some time off and go to the beach to enjoy the amazing weather. If you are not in Hawaii, drop whatever you are doing, go online, buy tickets to Hawaii, and come here as soon as possible to enjoy its breathtaking beauty and swim in the warm ocean. See you soon, Mahalo!
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