Right now, small businesses continue struggling to hire the right people. Competition is fierce. Although there are more candidates per role than in months past, the difficulty of hiring remains high.
But understanding these changes is not just about solving current problems; it’s about making sure your business is ready for the future.
Hiring is no longer a process, it’s a strategy, a critical tool that will not only shape the composition of your team but also the direction of your business. The hiring decisions you make today will drive your competitive advantage tomorrow.
With that in mind, let’s look at the current state of small business hiring, unravel the complexities, and strategize for a future where you thrive amidst the current challenges.
Understanding the shift in small business hiring
As large enterprises and Fortune 500s slow down their hiring and make cutbacks, it’s important to recognize that smaller “Main Street” businesses are facing their own unique challenges. Staffing shortages and the need to fill roles quickly have become top concerns for these businesses.
Despite these challenges, job growth continues to be a bright spot in the economy. In fact, private employers added an impressive 278,000 jobs in May alone. The leisure and hospitality, natural resources, and construction industries are leading the way when it comes to job gains, while manufacturing and finance are experiencing declines.
For small businesses, careful evaluation of finances and prioritizing essential roles is key. When they do decide to advertise job openings during these challenging times, it shows confidence and thoughtfulness towards their employees and the long-term success of the business.
What stands out now is the rise of job turnover as more workers seek higher pay, career growth, and better cultural fit.
With a 2.6% quit rate and a 4% hiring rate across the country, hiring is outpacing quits, meaning more people are leaving their current employer for new opportunities.
To attract and retain top talent, businesses need to offer more than just a paycheck.
Consider highlighting unique aspects of your company, such as sustainability efforts or a tight-knit team environment, to attract potential candidates.
Additionally, enhance your compensation package with non-monetary benefits like flexible scheduling, employee discounts, and professional development opportunities.
According to recent numbers, 38% of employees leave within their first year. And it can cost nearly 33% of their salary to replace them.
Invest in your employees to retain them and keep them invested in your company.
The market impact on small business hiring practices
Small businesses have felt the impact of labor shortages and the desire for remote work, but these challenges have given rise to great opportunities for growth. The trend of remote job postings has continued to catch on with Main Street businesses. In 2023, Wizehire has seen a jump from 8% to 12% of job postings on our platform offering remote options.
The gig economy is on the rise, providing cost-effective solutions for businesses through contract hiring. Additionally, remote work allows businesses to expand their talent pool and attract qualified candidates from a wider geographical area.
While recent pay transparency laws have added another layer of complexity to the recruitment process, they also allow businesses to attract top talent by being transparent about their pay scales.
Don’t let these challenges hold your small business back – embrace the changes and opportunities that come with them.
The impact of economic uncertainty and the ongoing effects of the COVID-19 pandemic cannot be underestimated. However, these challenges also underscore the importance of resilience and adaptability in the face of change.
Hiring is not just about filling a position. It’s about building a team that can drive your business forward. It’s about making strategic decisions that will shape the future of your business. And it’s about embracing change and turning challenges into opportunities.
In my experience working with small businesses, I’ve found that they are the most resilient part of today’s American economy.
We adapt, we innovate, and we rise to the challenge.
Sid Upadhyay is the CEO and Co-Founder of Wizehire, a leading hiring platform that helps small businesses grow with a better way to hire.