It’s hard to find good help, and it’s even harder to keep them. Especially for small businesses.
The unemployment rate is 3.6%, the lowest it’s been since December 1969. Which is great for workers, but bad for the smaller companies that make up the majority of U.S. businesses.
“Owners are trying to hold on to the employees that they have in a highly competitive labor market,” a March survey from the National Federation of Independent Business said.
In that same survey, 60% of respondents said they were hiring or trying to hire, where 54% weren’t able to find enough qualified applicants.
According to Glassdoor.com, wage growth at the small businesses is picking up, but median base pay is still lagging.
Median Base Pay by Company Size
- Companies with 50 or fewer employees – $47,864
- Companies with 51 to 100 employees – $49,653
- Companies with 5000+ employees – $53,225
“Small businesses often are limited in the amount of wage increase they can offer, so the fact that we’re seeing rising wages is really a sign of how tight the labor market is and how hard it can be for small businesses to find qualified workers,” said Daniel Zhao, Glassdoor senior economist.
In Bank of America’s spring 2019 Small Business Owner Report, two-thirds of respondents were worried about the economic impact of the current political environment.
When that same survey was taken last fall, 55% of respondents were anticipating improvement. In the most recent survey, that figure has fallen to 48%. More and more businesses are worried about the volatile political environment and the impact it will have on their businesses.
According to economists, the impact of President Donald Trump's tax, trade and regulatory policies is magnified for small businesses. Bank of America’s survey also found that 43 percent of respondents are concerned about tariffs and trade policy.
During trade wars, It's especially hard for the smaller businesses, especially for those in the goods-producing sector.
The smaller companies don't often have the relationships with multiple suppliers, so changing suppliers because of a trade war can be costly. Something like a language barrier could cause major issues for a small business that's trying import from another country instead of China.
And of course, the promised corporate tax cuts are more smoke than they are hiring accelerator. Almost 60 percent of Bank of America survey respondents expected the Tax Cuts and Jobs Act to be a good thing for their businesses. Unfortunately, since reality has set int, fewer than 3 in 10 said that it has been a boon for their business.
Job growth at small businesses has weakened slightly over the course of 2019, according to the Paychex IHS Markit Small Business Employment Watch.
Since small companies are more nimble in their response to market conditions, this slowdown could signal that slowing growth could spread in the future, said Frank Fiorille, vice president of risk, compliance and data analytics at Paychex.
Article originally appeared on NBCnews.com. View the full article here.
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