ADP Survey Finds Small Business Facing 2 Big Challenges


As the economy begins its recovery, small business owners say they face two main challenges: Finding qualified employees and adjusting to reduced sales totals.

Businesses also cited cash flow, the economy, increase in production costs, capacity constraints and supply chain disruption as ongoing challenges.

How do we know that? From May 10-25, 2021, ADP surveyed more than 2,000 small business owners. It’s called the ADP Small Business @ Work Survey. The surveys will be done quarterly, with the results discussed via a webinar.

ADP Chief Economist Nela Richardson said that research should be ongoing as the business changes are “ongoing and evolving.”

ADP Small Business @ Work Survey

Here’s a look at the results of the first survey.

Workforce Trends

During the first 3 months of 2021, jobs increased by 6%. In the second quarter, job increases are expected to hit the double digits. 66% of those increases come from small businesses.

If hiring is increasing, why are so many people out of work? Richardson said that the hiring is “not in step” with business growth. In fact, 1 in 3 businesses responding to the survey said they were having trouble finding employees.

Richardson gave several reasons:

  • Hesitation from Employees – Employees are taking more time to return. Expanded unemployment is one of the factors of this hesitation, but that is temporary.
  • Ongoing health concerns – Among employees of industries that involve high social contact.
  • Family responsibilities – Women are most affected by this, Richardson said. During the pandemic, women left the workforce at 4 times the rate men did.

Small Business Challenges

When the pandemic hit us full force, 22 million jobs were lost. Of those 22 million jobs, 40% were in the leisure and hospitality business.

And although those businesses have or are reopening, that’s the industry having the hardest time filling jobs.

Richardson said that hiring and retaining employees will be of high importance in all industries.

Skilled recruiting will be key to that process.

What Has Shifted in Workforce Trends?

During the pandemic, businesses underwent accelerated technology adoption. Those innovations aren’t going away, Richardson said.

With accelerated technology, business needs have changed, along with a need for employees trained to use the technology.

Younger workers (less than 24 years old) were the backbone of the leisure and hospitality industry. And those younger workers were hit hardest by job losses during the pandemic. For that reason, many are switching industries.

Remote work is here to stay, Richardson said. Interestingly, remote workers are contributing “free hours” to their employers. The “free hours” are time spent working during lunch or breaks, or after regular work hours.

Why is this happening? Richardson gave two reasons: Those employees want job security, and those employees have accepted added responsibilities.

Future Predictions from Survey Respondents

  • Two-thirds of businesses with more than 25 employees said they would be hiring within the next 6 months.
  • Nearly all the businesses said they expected to keep their hours the same or increase hours within the next 6 months.
  • One-half of the businesses said they would keep wages the same in the next 6 months. Larger firms were more likely to increase pay.
  • One out of five businesses increased pay or gave special bonuses during the past 6 months.
  • 31% of businesses plan to raise prices in the next 6 months.

Increased growth, in an available workforce and in revenues, is expected in the fall. The growth will be tied to reopening of schools and child-care availability.

Image: Depositphotos

Comment ▼

Lisa Price Lisa Price is a freelance writer living in Barnesville, Pennsylvania. She has a B.A. in English with a minor in journalism from Shippensburg State College (Pennsylvania). She has worked as a trucking company dock supervisor, newspaper circulation district manager, radio station commercial writer, assistant manager of a veterinary pharmaceutical warehouse and newspaper reporter.

Comments are closed.