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Expert Answers to Biz Questions
Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
Low Unemployment Results in Lack of Workers for Small Businesses
As of April 2019, the U.S.unemployment rate is at its lowestsince December of 1969. At 3.6 percent, the labor market is positively booming. However, this “worker’s job market” may backfire on small businessesstruggling to keep employees.
Economic Upturn
Analysts originally predicted the addition of 190,000 jobs in April, but that number was easily surpassed with a whopping 263,000 jobs. Average hourly earnings are on the rise as well with a growth rate of 0.2 percent in April and an annual gain of 3.2 percent. Most economists predict this economic upturn in the labor market will continue to push wages higher.
Currently, there are more open positions than workers to fill them. Companies are competing for the most qualified employees to join their ranks. This competition, coupled with low inflation and low borrowing rates, has resulted in a solidboost for the economy.
Bad News for Small Businesses
With such a highly competitive labor market, small business owners are struggling to find and retain qualified employees. Compensation is slowly rising, but that’s not enough.
“Small businesses continue to be the driving force behind the country’s strong economy, but they’re facing significant barriers in finding workers at near record levels,” said the National Federation of Independent Businesses President Juanita Duggan.
The NFIB’s monthlySmall Business Jobs Reportfor April 2019 indicates that 57 percent of small business owners either hired or attempted to hire new employees. Of those, 86 percent reported few to no qualified candidates for their positions. Nearly a quarter of all business owners surveyed believe finding qualified workers is currently their “single most important business problem.”
What Will the Future Hold?
Smaller businesses don’t have the resources that larger companies do when it comes to recruitment and retention of quality employees. Bigger companies haveaccess to additional financial supportand can offer better benefit packages, flexible work schedules, and advanced training opportunities. Even though many small businesses are increasing their wages, they’re not doing so fast enough to keep up.
The current political environment doesn’t instill confidence in small business owners, either. Nearly two-thirds of those surveyed by Bank of America for their Spring 2019 Small Business Owner Report are worried about the impact future political decisions will have on the economy. Less than half think the national economy will improve.
The president’s tax changes, trade tariffs, and regulatory policies top the list of concerns. Many owners are worried these changes will negatively affect their businesses and their ability to hire workers. Small companies don’t have the advantage of high-level contacts or strong relationships with officials who can guide them in the right direction.
With uncertainty on the horizon, many small business owners are cautious in regards to their recruitment strategies. Unemployment may be down, but finding quality candidates for positions in smaller companies is growing more difficult by the day. Patience and persistence have become the new mottos for the country’s small businesses. Hopefully, their efforts pay off in the future.
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