U.S. small businesses hired 0.43 percent fewer workers in July, according to the most recent CBIZ Small Business Employment Index, which tracks more than 3,700 companies with 300 or fewer employees.
CBIZ executive vice president Phil Noftsinger said the tight labor market may be a factor. “Essentially, the employable population needs to increase, or we will continue to see flat numbers for the rest of the year,” he said.
A recent Oasis survey of 319 U.S. small business owners found that 58 percent said the “inability to find employees with the right skills to fill key positions” is the most pressing current workforce challenge in their business.
Fifty-eight percent of respondents said they worry about losing the best people from their company, and 62 percent said they often find it hard to fill important roles.
Still, while 50 percent of respondents said they try to offer competitive compensation, 13 percent said they “only pay the basic level of compensation.”
“An organization’s talent is often a company’s only differentiator,” Oasis director Mary Anne Tate said in a statement. “High-performing employees always have options to move. To attract and retain the best available talent in the market, providing competitive compensation and health benefits packages are the table-stakes.”
When filling open positions, 51 percent of respondents said they rely on a combination of internal employee development and external hiring, while 30 percent said they have a good pipeline of developing employees to cover most of their needs, and 19 percent said they routinely look externally before filling roles.
Zero New Hires
ScaleFactor’s separate State of SMB Finance Report, based on a survey of 500 principal decision makers at U.S. SMBs, found that more than half of respondents made zero new hires in the past year, even though the majority showed stable or growing revenue numbers.
The survey also found that 76 percent of respondents have no plans to hire a CFO in the future. Fifty-eight percent currently use an accounting/back-office software platform, with time savings and fewer mistakes cited as the top benefits of doing so.
“The data from our inaugural report highlights the fact that small business owners have a lot on their plate, from running the business to performing back-office tasks,” ScaleFactor founder and CEO Kurt Rathmann said in a statement.
“We are experiencing a new phase that focuses on capturing the efficiencies of an intelligent workforce through the use of insightful and prescriptive technology,” Rathmann added.
Still, technology implementation is linked directly to company size – while just 34 percent of very small businesses are leveraging AI-based or ML-based software, 72 percent of medium-sized businesses are doing so.
And small businesses are continuing to seek funding. The most recent Lendio SMB Economic Insights report states that small business loan inquiries increased by 57 percent in Q2 2019 over the previous three-quarter average, the number of small business loans funded in the quarter grew by 13 percent, and the average loan amount among small business borrowers increased by 11 percent.
“Findings from this report, particularly the growth in loan inquiries, number of loans funded and the average loan amount, show that business owners are still optimistic and hungry for growth,” Lendio CEO and founder Brock Blake said in a statement.