Concerns for small business as labor shortages continue

The economy heading into 2022 is changing and Ohio National Federation of Independent Businesses Executive Director Roger Geiger is concerned for small businesses.

While Ohio is on track for a record number of new small business filings — well over 150,000 new filings in fact — many current small businesses are struggling. A recent survey of NFIB membership shows the impact of supply chain and labor shortages.

“A lot of those folks who are coming back to work may very well be creating their own businesses,” Geiger said.

He said that falls in line with historical practices during an economic recovery. This has accelerated under the gig economy working for companies like Uber. Geiger also sees a trend toward new technology and internet related companies and people working from home.

That transformation period has been hard on existing businesses.

“Historically small businesses have always been at the end of the line for labor, because by the time big businesses get theirs and by the time government gets theirs, small businesses are still struggling to get the workforce they need,” Geiger said.

“In 30 plus years with the NFIB, I’ve never seen a statistic, where 60 percent of our members say it’s extremely difficult to hire somebody right now,” Geiger said.

He said it has a ripple effect on the business and the ability to generate revenue.

That means margins are slimming as pay and benefits are being raised to attract more workers.

“We need to get all Ohioans back to work. Right now it’s an employee market,”

Geiger said businesses are being flexible and generous. In Auglaize County the unemployment rate as of the end of November was less than 3 percent, an indicator that those who can work are choosing to.

Supply chain issues may have a bigger impact on small businesses.

Our members don’t order in these big bulk orders, like

these big box stores do,” Geiger said. “They are at the end of the line, when it comes to supply chain distribution.”

State grants and legislation focused lowering the cost of doing business in the state are more likely to have an impact on small businesses than loans as small business owners aren’t likely to take on more debt when facing uncertainty.

Geiger said legislation like the small business fairness act, helped level the playing field with who is considered an essential business without picking winners and losers. early mandates in 2020 disproportionately affected small businesses.

Geiger wants federal and state law makers to be mindful about how regulations, fees and taxes impact small business owners who are facing more external pressures from supply chain and labor demands.

Those businesses have been resilient but still need local support. He said predictions about small businesses shuttering due to the pandemic have been largely proven wrong.

“This can be solved by consumers,” Geiger said. “If consumers are willing to shop small and support their small business local community, going to that small retailer on Main Street as opposed to the big box store. Spending their dollars in small enterprises is extremely important.”