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What Changes Are Businesses Making Amid the Great Resignation?
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The Great Resignation and subsequent labor shortage continues on, leaving business owners scrambling to fill vacant positions.
Through its Main Street Index, CBIZ — a Cleveland-based financial, insurance and advisory services firm — has gauged the outlook for small and midsize businesses across the U.S. The fourth-quarter index finds that business owners are increasingly listening to workers’ demands for higher pay and more robust benefits packages.
Businesses are prioritizing giving workers what they want, but hiring troubles remain
As workers voluntarily leave their jobs in droves, small and midsize business owners tell CBIZ they’re doing what it takes to keep employees.
More than a quarter of business owners (27%) say that new compensation methods for new workers will be a focus over the next 12 months — a 6 percentage point jump from the previous quarter. Meanwhile, nearly one-fifth of respondents (19%) say enhancing benefits packages is a priority — this also saw a 6 percentage point increase from the third quarter.
But how else will small businesses forge ahead to improve or increase business growth? Here’s where companies intend to invest their resources in the next 12 months — and how it compared to the previous quarter:
- Adapting operations: 54% (54% in Q3)
- Supply chain updates: 29% (28% in Q3)
- Flexible workforce: 28% (33% in Q3)
- Cash flow analysis: 26% (28% in Q3)
But while business owners work on their plans for the next 12 months, they also have to tackle staffing issues. According to the CBIZ index, here’s the percentage of small businesses that are short-staffed:
- 1% to 10% short-staffed: 39% of businesses
- 11% to 20% short-staffed: 34%
- 20% to 40% short-staffed: 13%
- Not short-staffed: 10%
- 41%-plus short-staffed: 4%
Results of the index also show that a lack of entry-level and associate-level employees is leading to this short-staffing. Here’s a breakdown, by level, of what employers are having trouble staffing:
- Entry level: 60%
- Associate level: 60%
- Manager level: 26%
- Executive level: 5%
The search for workers can be such a struggle that 40% of businesses are supplementing staff with independent contractors.
Inflation top concern for small, midsize businesses
Inflation looms like a black cloud over customers and small businesses alike. But besides inflation, staffing shortages and supply chain disruptions are also top concerns for businesses.
Here’s what worries businesses the most:
- Inflation: 57%
- Staffing shortages: 54%
- Supply chain disruption: 46%
- COVID-19 resurgence: 44%
- Change in tax policies that impact business: 31%
- Cyber risk: 22%
- Managing hybrid or remote workforce: 16%
- Client receivables/collections: 16%
- Travel restrictions: 11%
- Other: 5%
Still, if there’s a bright spot to be found, revenue loss concerns dropped to 30% in the fourth quarter, down from 35% in the third.
All in all, though, confidence among business owners remained consistent quarter over quarter, with the majority feeling positive about what the next 12 months will bring. And though this sentiment remained consistent, there was a 6 percentage point increase in respondents who felt “very positive” about their businesses.
Here’s the full breakdown:
- Very positive (31% in Q4, versus 25% in Q3)
- Positive (51% in Q4, versus 57% in Q3)
- Negative (15% in Q4, versus 15% in Q3)
- Very negative (3% in Q4, versus 3% in Q3)
If you’re a small business owner looking to make improvements or updates to your company — or you need a financial boost to invest in hiring — consider taking out a small business loan. Small business loans are available in varying amounts, terms and interest rates to tailor your needs and situation.
Methodology: CBIZ surveyed nearly 2,000 U.S. businesses with fewer than 100 employees from Nov. 30 to Dec. 31, 2021. Respondents spanned 27 industries across the U.S.