Small businesses play an important role in the United States labor market, and they are often considered the “lifeblood” of the U.S. economy. They employ 47.1% of all U.S. workers and contribute to 41% of all U.S. economic activity. SCORE’s latest “The Megaphone of Main Street” data report series delves into the story behind the impact of COVID-19 on small business hiring and the challenges small business owners face in their search for employees.
Key research findings include:
- Employment challenges currently rank highest among business owners. “Hiring the right talent” is the number one challenge (63.4% of business owners), overshadowing “finding customers,” followed by “retaining or motivating employees.” In 2017, financing challenges were ranked higher.
- Two-thirds of business owners (61.2%) report having unfilled job openings within the past six months.
- 89.5% of business owners see hiring new employees as somewhat or very difficult. Once employees are hired, 69.9% have difficulty with onboarding and 62.9% cite troubles with retention.
- Pressure to increase wages to stay competitive now impacts twice as many business owners (54.7%) compared with 2017 survey results (26.2%).
- 70.3% more business owners cite lack of health care benefits as a barrier to hiring, compared with 2017 survey results.
- Despite recent challenges, 67.2% of business owners surveyed report feeling optimistic about the next six months. This shows little decline compared to 2017 survey results showing 69% optimism.
- 56% of business owners plan to hire employees in the next six months.
- 60.5% of small businesses have increased wages to attract and retain employees.
- 43.6% of business owners now use job posting sites with growing success. Still, “word of mouth” from other employees (56%) remains the top way to attract new employees.
- When asked what resources would be most helpful for small business success, owners cite better health care options (51.1%) first, followed by loan forgiveness or debt relief (49.9%) and access to capital (41.5%).
- 55.1% of small business owners expect hiring challenges to continue through 2022 and beyond.