Despite recent job growth, CNBC and SurveyMonkey’s Small Business Survey reports small businesses in the post-pandemic world are having an enormous problem finding and keeping employees.
In February, the U.S. experienced the most significant monthly job growth gain since July 2021. However, that number is deceiving when it comes to small businesses. While ADP’s private payrolls report stated that companies with more than 500 workers added more than 550,000 positions in February, companies with fewer than 50 employees recorded a loss of almost 100,000 employees. A poll by Alignable noted that these losses could be attributed to reduced operating hours and increased labor costs. They don’t generate the revenue they need to operate, resulting in reduced cash flow, leaving less money to pay employees, trapping business owners in a cycle.
In addition to the consistent loss of employees, small business owners find it challenging to bring on new talent. The Survey Monkey report noted that the majority of small business owners surveyed are expecting turnover to be a problem in the next six months. More than 50% of small business owners with fewer than 50 employees reported that it’s extremely difficult to find qualified talent, and an additional 29% said that they’ve been unable to fill certain open positions for at least three months. And even when candidates for open positions are found, they often aren’t as qualified as many business owners would like. According to NFIB’s monthly jobs report, 22% of small business owners said that labor quality is their top issue.
Main Street Alliance’s Policy and Political Impact Director Didier Trinh said that these labor issues would continue to post a problem for small businesses and have had a striking economic impact. While small businesses are not in as dire straits as they were at the beginning of the pandemic, Trinh said that Main Street Alliance members had been troubled by supply chain issues that allow large businesses to increase corporate concentration.
“Despite the fact that small businesses have shown time and time again that they’re resilient and able to adapt to very fast-changing circumstances,” Trinh said, “they are nowhere near at the level of profitability that they were before the pandemic.”