Small and medium business owners are benefitting from a strong economy but, owing to a lack of qualified workers, are struggling to meet high customer demand. In Q1 of 2018, 30 percent of surveyed medium-sized businesses reported “attracting and retaining a quality work force” as their biggest challenge for the year, and it appears that problem continues unabated. In addition to facing a tight labor market, SMBs have to compete with larger companies for talent. (Some business owners have even recruited still-imprisoned inmates to work for them.)
This hiring challenge comes at a time when business owners are actually reporting record-high confidence and optimism. The Q1 2018 “Private Capital Access (PCA) Index” report from Pepperdine University and Dun & Bradstreet says that 36 percent of small businesses surveyed think their business will perform substantially better in 2018 than it did in 2017. The survey also found that:
- Almost half of small businesses surveyed (48 percent) are extremely confident their business will grow in 2018.
- The majority of small business owners surveyed (60 percent) were in need of financing for growth due to increased demand, and 30 percent of those surveyed thought raising debt financing in the next six months would be easy.
- A plurality of small businesses surveyed (39 percent) are planning on hiring 1 to 2 employees in the next six months, but 13 percent of the survey respondents cited the inability to find qualified employees as the main reason for not being able to hire.
Past surveys have shown SMBs were less likely to hire new employees because they were unsuccessful at obtaining outside financing, but now it seems SMBs are ready and able to hire but can’t find employees, especially quality ones. There are some things small and medium businesses can do to help alleviate this issue, and Business Credit Expert Amber Colley has some good recommendations on how to attract and retain quality employees.
If you are unable to hire because you’ve been denied a bank loan, you may be able to get alternative financing. Learn more about alternative lenders and how you may be able to get funding.
Photo Credit: Jellybeens4, Twenty20