Some 40% of businesses will see at least one unfilled job in 2020 according to a study by SCORE. This is in stark contrast to only 10% of businesses that could not fill jobs in 2009.
Score’s data shows the economy is strong though slowing down with an expected drop by 2% this year. With 67% of small business owners anticipating an economic downturn or recession in the next 12 months. Small business owners, however, are optimistic with a significant portion of them (75%) rating their company cash flow as either ‘good’ or ‘very good’ in 2019.
“2019 was a successful year for small businesses, with the majority of business owners reporting good cash flow, despite many struggles to fill job openings,” said SCORE CEO Bridget Weston.
Despite a possible waning of economic growth, businesses are claiming to be somewhat financially ready for an economic downturn. In fact, almost a quarter (24%) feel very prepared in case of an economic downturn. While a whopping 62% feel somewhat prepared for such an eventuality. At the end of the spectrum, 13% feel very unprepared while only 1% feel not prepared at all.
Besides worries of some economic slowdown businesses also fear cyber attacks and natural disasters to take a dent out of their profits in 2020. Of all the cyber attacks that affect the nation 43% of them target specifically small businesses. With climate change and related environmental challenges, natural disasters are ever more affecting businesses. Between 40% to 60% of small businesses never open their doors after a disaster according to SCORE.
Changes Across the Board are Only 0.1%
Unemployment in 2020 across the nation is set for 3.5%, which is down by 0.1% from last year. According to SCORE GDP growth will drop 2.2% in 2019, 2.0% in 2020 and 1.9% in 2021. The numbers for unemployment, inflation, and manufacturing are all only experiencing a change of only 0.1 percent by 2021.
This will signal yet another year of an employees’ market with businesses required to fight among themselves to secure the scarce talented workforce. The U.S. is currently experiencing the lowest unemployment rate since 1969 which would require a change of strategy by businesses.
This will require changing the traditional thinking in regards to employee compensation, workplace culture and the company’s reputation. Working on the latter two will be a challenge for businesses in the coming years to retain their specialist workforce. This is against the background of more professionals opting to work freelance or flexible working arrangements. The key to success in 2020 will fall on the business’s abilities to learn, adapt to and overcome these challenges.
Finding Opportunities in Risks
A tight labor market means there are more jobs than people to fill them. This will signal opportunities for small businesses to employ from the freelancer pool. Businesses can now get the services they need without providing working space, training, equipment and related costs by hiring freelancers.
By hiring more virtual assistants whether for a few hours per day or full-time small business can avoid going over budget. This comes in handy in an uncertain economy. Virtual Assistants are paid either on an hourly rate or fixed fees per week or month.
This means small businesses can get the service they need without paying for benefits and taxes thus keeping costs down. If you are not happy with the prospect of outsourcing, perhaps you could look towards retaining your staff by providing attractive perks.
In regards to cyber attacks, small businesses will need to focus on identifying their online vulnerabilities and work towards protecting their data. By getting educated on phishing attacks and other hacking ploys, businesses can put in place measures to protect themselves from online attacks. In 2019 small businesses were the largest single sector to be hit by cyberattacks of which 71% were financially motivated.
As far as natural disasters are concerned, businesses will have to make sure their company is covered by insurance. They need to go over their policy and make sure they are covered from any natural calamity.
Small Business Outlook 2020
Take a look at the SCORE infographic for the rest of the data.