The economic confidence of small business owners remains high, but finding qualified talent is still a challenge in a tight labor market.
The fall 2018 Bank Of America Small Business Owner Report (PDF) has revealed entrepreneurs are happy with the direction of the economy. According to the report, owners are anticipating revenue growth and they are looking to hire and expand in the coming year.
Fall 2018 Small Business Owner Report
In the report, more than half of business owners who wanted to hire in the past year couldn’t find qualified candidates. This has been responsible for hindering the growth of these businesses. And if the trend continues, the difficulty in finding the right talent will further hamper their desire to grow.
In the report and press release, Sharon Miller, head of small business, Bank of America, said the hiring plans of small businesses are on the rise, peaking to the highest level in three years.
So it is only natural that businesses start taking advantage of a healthy economy. Miller added, “While we are seeing an increase in hiring plans and loan applications, today’s competitive job market has created a challenging environment to attract and retain small business talent.”
The Fall of 2018 Bank of America Small Business Owner Report Survey was carried out online between August 30 and September 13, 2018 using pre-recruited online small business owners.
A sample of 1,067 business owners in the US with two to 99 employees and annual revenues between $100,000 and $4,999,999 took part in the survey.
Competition for Talent
The Bank of America report says this is one of the tightest job markets in a half-century, and more entrepreneurs are looking to hire in the year ahead.
Close to a third or 27% of businesses said they are planning to hire over the next 12 months. This comes as 58% of business owners in the survey said they are finding it difficult to find qualified candidates for open positions.
One in four of business owners also said it took more time to fill an open position in 2018 than it did in 2017, with 50% attributing this problem to the tightening labor market.
In addition to finding the right talent, businesses are also losing their staff. Twenty-four percent said they lost at least one employee over the last year and 11% said they lost at least 10% of their workforce.
The reasons for leaving include everything from accepting a higher salary offer to starting their own business and accepting a position at a large company.
New Hiring Strategies
With fewer talent to go around, business owners are adopting new strategies to attract qualified and higher quality candidates.
All of these efforts come at a time when the vast majority or 82% of business owners say less than half of the job applicants are qualified.
Some of the measures small business owners have taken include shifting to a more flexible culture (25%), using social media to attract talent (23%), offering higher salaries (17%), emphasizing community impact or charity work (12%), using an outside recruiter (9%), and offering a referral fee (8%).
Business owners are also using word-of-mouth, print advertisements, job fairs and websites postings to bring in new talent.
This doesn’t always deliver though and owners are having to offer more perks to attract candidates. The perks include offering flexible hours (57%), professional development (39%), flexible work location (33%), discretionary bonuses (31%), healthcare (26%), and retirement benefits (50%).
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