Small businesses struggle amid nationwide labor shortage
WASHINGTON (TND) — America's small businesses are falling behind when it comes to hiring.
Rampant inflation is taking a crippling toll. Many owners say they can't keep up with wages and benefits offered by larger companies and corporations.
Staffing at places with 50 or fewer employees declined in three of the past four months, according to payroll data.
Logging through the mountains of Oregon is no doubt, demanding work but the biggest challenge, right now, isn't the physical strain, says owner Jim Gahlsdorf: it's the hiring process or lack thereof.
"Our biggest push is to get people through the door, just to apply,” Gahlsdorf said.
Gahlsdorf Logging has about 20 employees — half of what it used to be. The local contractor says it's difficult to keep crews fully staffed or even forced to sometimes turn down jobs.
"Used to be able to expand in a heartbeat and go out and hire almost a full crew,” Gahlsdorf said.
A recent study done for the Wall Street Journal by Vistage Worldwide shows that 63% of small-business owners say hiring challenges are affecting their ability to operate at full capacity. More than 800 businesses were surveyed.
"There’s just not enough bodies coming up through the pipeline to fill all the jobs we have,” said Matt Becker with Pridestaff.
Becker is a talent recruiter and staffing specialist. He says in a shaky economy, some find larger companies and corporations a safer bet.
That's now driving more small businesses to raise wages and improve benefits to stay competitive.
"At the same time, especially now with inflation, we’re hitting the ceiling of what a lot of those small businesses can do, between health insurance going up, between inflation going up, between wages going up, there’s not much left over,” Becker said.
Right now, 76% of small businesses report boosting wages in response to labor shortages.
Gahlsdorf, who has owned and operated his northwest Oregon company since the mid-80s, is doing just that — increasing pay in a market now experiencing decreased turnout.
"How far do we have to go and how far can we afford to go. It takes quite a while to get that recouped from the people we work for because they’re facing the same thing. Everybody is trying to save a buck,” Gahlsdorf said.
That same survey found that confidence among small-business owners continues to fall, dropping in June to lows last seen in July 2020, the middle of the pandemic but more than half polled expect headcounts to increase in the coming year.
