As America continues to reopen, small business optimism around hiring prospects are muted, as an equal number say they are either more optimistic or more pessimistic compared to before the COVID-19 pandemic began, according to a poll taken June 16 – 23, 2021 and released by the U.S. Chamber of Commerce and MetLife.
Most small businesses have not yet begun to recruit, interview, or hire new talent this year, with just one in three small businesses (33%) reporting they are actively seeking, recruiting, or interviewing new workers this year. Less than half of small businesses who are actively hiring report that it is easy to find candidates that meet certain criteria such as: finding candidates in their area (47%), with the experience they need (44%), and the skills they need (44%).
“Small businesses are bearing the brunt of the current worker shortage. Many have given up on actively recruiting new workers as its too hard to find skilled and experienced workers for their open positions,” said Tom Sullivan, vice president of small business policy at the U.S. Chamber of Commerce. “To enable small businesses to grow, compete, and thrive coming out of the pandemic, we need our government leaders to make it as easy as possible for Main Street to find and hire the talent they need.”
It’s often medium-sized small businesses—such as local restaurants, bars, or Main Street retailers—which are more likely to struggle to find new workers, especially those with the right skills and experience. Forty-eight percent of small businesses with 5-19 employees say it was hard to find enough candidates to fill open positions. Additionally, 44% of these sized businesses said it was hard to find candidates with the needed experience and 41% of them said it was hard to find workers with the right skills.
“We are so desperate for workers that if 15 people showed up at our front door tomorrow morning with work boots on and a willingness to landscape, we’d give them the keys to a truck and put them right to work,” said Ian MacLean, President of Highland Landscaping LLC in Southlake, TX and Chair of the U.S. Chamber Small Business Council.
The worker shortage and lack of active recruitment are having effects on small business workflow. Of those actively hiring and reporting at least some difficulty finding new workers, the most common response (54%) was that the business owner had to personally work more hours or take on more roles. Forty-two percent of those reporting difficulty had to ask staff to work overtime or longer hours, and 31% of them reported difficulty with scheduling because they did not have enough staff.
“Workforce shortages are beginning to negatively impact our business. We are running lean, due to rising costs of supplies and the inability to find qualified and willing employees,” said Joe Shamess, Co-Founder, Flags of Valor in Winchester, VA. “The difficulty in hiring is an added cost because of the time devoted to finding talent and widespread wage inflation. And what’s worse is the lack of new employees is starting to negatively impact team morale.”
After the pandemic, small businesses are planning a mix of tactics to lure back workers including increased pay and new benefits. About a quarter each plan to find new ways to advertise (26%) or to increase pay (24%). Also, 22% of small businesses plan to offer more flexible working hours and 21% planning to offer a hybrid or remote work environment.
The majority of small business owners (55%) think the U.S. small business climate will return to normal in six months to a year. Only 27% think the climate will return to normal in under six months. However, the desire to open is there, with around three in five small businesses (59%) saying it is likely they will fully open as soon as their state allows it.
Adding to this continued uncertainty over recovery timelines, more than three in five small business owners are concerned about the pandemic’s impact on their business’ health (63%), and the well-being of their employees (62%) and themselves (61%). Concerns rise slightly among larger small businesses. For example, 59% of small businesses with fewer than five employees are concerned about COVID-19’s impact on their business’ health, compared to 75% of those with 20 or more employees.
Overall, 62% of small businesses say they are concerned for their business’s future, although this is a decline from 76% in Q1 2021. Yet, one in four small businesses (26%) remain very concerned about the pandemic’s impact on their business’ future.
“It really is encouraging to see fewer small businesses concerned for their future, but we have to acknowledge that too many of those small businesses continue to face uncertainty and doubt,” said Jessica Moser, senior vice president, Small and Specialty Business at MetLife. “It is essential that small business owners have the resources to successfully reopen and recruit the talent they need to survive and thrive.”
To learn how the U.S. Chamber is working to help companies and our country address the workforce shortage, visit uschamber.com/america-works.