Small businesses still struggle
Survey respondents cite lack of qualified workers as well as competition over pay, benefits
NEW YORK — Some small businesses are still struggling to hire qualified workers, even as Americans return to the U.S. job market in droves.
Hiring and retaining employees remains the top challenge for small businesses, according to a survey of 1,100 businesses by Goldman Sachs 10,000 Small Business Voices out last month. Ninety percent of businesses that are hiring are finding it difficult to recruit qualified candidates for open positions.
In general, the U.S. job market is sizzling. An unexpectedly strong recovery from the brief but devastating coronavirus recession left companies scrambling to recall workers they had laid off in the spring of 2020 and to find new ones.
America’s employers added 428,000 jobs in April, extending a streak of solid hiring that has defied punishing inflation, chronic supply shortages, the Russian war against Ukraine and much higher borrowing costs.
Friday’s jobs report from the Labor Department showed that last month’s hiring kept the unemployment rate at 3.6%, just above the lowest level in a half-century. Employers have added at least 400,000 jobs for 12 straight months.
But small-business owners believe the job market is a tale of two recoveries.
Eighty-eight percent of respondents in the Goldman Sachs survey say small businesses are struggling relative to larger companies in their local communities. Forty-two percent say they have lost employees to larger businesses that are paying more.
“Small businesses are struggling to compete with larger employers on pay and benefits and cite a lack of qualified workers,” said Joe Wall, National Director of Goldman Sachs 10,000 Small Businesses Voices.
Data from payrolls processing firm ADP show a widening gap in hiring between businesses with 500 or more employees and businesses with less than 50 staffers. Those smaller businesses have lost jobs in three of the past four months.
The U.S. now has two job openings for every unemployed person. But a large number of smaller businesses say they’re having trouble getting candidates to even apply for openings, particularly in the hardhit leisure and hospitality industry.
“I’m worried about burnout. It’s frustrating, very frustrating,” said Shirley Hughes, owner of Sweet Cheats bakery in Atlanta.
Sweet Cheats had nine staffers at the pre-pandemic peak. Now Hughes has two plus herself. She’s curtailed business hours — closing time has gone from 8:30 p.m. to 6 p.m. and now 4 p.m. — giving her and two bakers more time in the kitchen.
Still, Hughes says she now works 80 to 90 hours a week.
Inflation is another challenge.
Higher expenses not only hurt businesses’ bottom lines, but also affect how well they can retain and attract workers. Before the pandemic, Hughes would get hundreds of applicants for openings.
Now, she says she’s lucky to get one or two, and they tend to want $18 or $20 an hour, when she offers $14 or $15 for experienced bakers.
Hughes has had to add benefits for her two longtime staffers to hang onto them.
While most major U.S. industries have regained the jobs lost to the pandemic, employment in leisure and hospitality is down by 1.5 million, or 8.7%, since February 2020, according to the Bureau of Labor Statistics.