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Small businesses play an important role in the United States labor market, and they are often considered the “lifeblood” of the U.S. economy.
The Fall 2021 Megaphone of Main Street Small Business Jobs Report discusses small business hiring and wage trends impacted by the COVID-19 pandemic. The report shows that small businesses continue to face challenges in hiring and retaining employees, with a majority reporting labor shortages and difficulty filling job openings. It also explores the factors driving wage increases and the pandemic's impact on employee benefits and compensation packages.
Key research findings include:
Part 1: Small Businesses Struggle to Hire
- Employment challenges currently rank highest among business owners. “Hiring the right talent” is the number one challenge (63.4% of business owners), overshadowing “finding customers,” followed by “retaining or motivating employees.” In 2017, financing challenges were ranked higher.
- Two-thirds of business owners (61.2%) report having unfilled job openings within the past six months.
- 89.5% of business owners see hiring new employees as somewhat or very difficult. Once employees are hired, 69.9% have difficulty with onboarding and 62.9% cite troubles with retention.
- Pressure to increase wages to stay competitive now impacts twice as many business owners (54.7%) compared with 2017 survey results (26.2%).
- 70.3% more business owners cite lack of health care benefits as a barrier to hiring, compared with 2017 survey results.
- Despite recent challenges, 67.2% of business owners surveyed report feeling optimistic about the next six months. This shows little decline compared to 2017 survey results showing 69% optimism.
- 56% of business owners plan to hire employees in the next six months.60.5% of small businesses have increased wages to attract and retain employees.
- 43.6% of business owners now use job posting sites with growing success. Still, “word of mouth” from other employees (56%) remains the top way to attract new employees.
- When asked what resources would be most helpful for small business success, owners cite better health care options (51.1%) first, followed by loan forgiveness or debt relief (49.9%) and access to capital (41.5%).
- 55.1% of small business owners expect hiring challenges to continue through 2022 and beyond.
Part 2: Small Businesses Require Help to Recover
- Despite recent challenges, 67.2% of business owners surveyed report feeling optimistic about the next six months. This shows little decline compared to 2017 survey results showing 69% optimism.
- 56% of business owners plan to hire employees in the next six months.
- 60.5% of small businesses have increased wages to attract and retain employees.
- 43.6% of business owners now use job posting sites with growing success. Still, “word of mouth” from other employees (56%) remains the top way to attract new employees.
- When asked what resources would be most helpful for small business success, owners cite better health care options (51.1%) first, followed by loan forgiveness or debt relief (49.9%) and access to capital (41.5%).
- 55.1% of small business owners expect hiring challenges to continue through 2022 and beyond.
Small businesses continue to face challenges in hiring and retaining employees due to the pandemic's lingering impacts. SCORE suggests strategies such as offering competitive wages and benefits and creating a positive workplace culture to address these challenges.
SCORE's survey reveals that small businesses remain optimistic despite ongoing hiring challenges. Small business owners are confident in their ability to adapt and recover from the pandemic. Strategies like increasing wages and offering flexible work arrangements are being used to overcome hiring challenges.
The Megaphone of Main Street data report series by SCORE provides insights into small business trends and challenges in the United States. The reports cover a range of topics such as the impact of the COVID-19 pandemic on small businesses, financial management strategies, and marketing tactics. The data is collected through surveys of small business owners, providing valuable information for entrepreneurs, policymakers, and other stakeholders interested in the success of small businesses.
To speak with SCORE’s media relations team or request an interview with executive staff, expert business mentors or small business clients, please email media@score.org. Visit our Media Resources for data reports, FAQs and more.
