August 11, 2022
Rising inflation rates, a possible recession, worker shortages, and a shift in global consumer and workplace trends have presented small businesses with a unique set of obstacles in the post-pandemic world. For businesses to thrive, they must learn to navigate these evolving circumstances and embrace technologies to make themselves and their workers more productive and efficient.
In a special edition of CO—'s Start. Run. Grow. series entitled “Navigating Shifting Business Trends,” business owners and industry experts discussed the current economic state of small businesses and how entrepreneurs can hire and retain employees in an increasingly hybrid work environment.
Is America in a True Recession?
The textbook definition of a recession is two consecutive quarters of negative economic growth, which occurred in 2022’s Q1 and Q2. However, a few economic outliers make it difficult to say if this is a true recession.
“Usually when you have an economic recession, consumers are pulling back their spending, but the latest data shows that consumers aren't just spending more because of inflation, they're actually spending more, even with inflation factored in,” said Neil Bradley, Executive Vice President, Chief Policy Officer, and Head of Strategic Advocacy at the U.S. Chamber of Commerce. “Rather than the question of whether or not we're in a recession … the truth is that we are in an odd economic time with lots of factors pointing in opposite directions.”
To prepare themselves for a recession or recession-like conditions, Bradley recommended small businesses focus on their own day-to-day data over national trends. Businesses should also have a contingency plan should the demand fall by 5% or 10%.
Businesses Should Involve Employees in Hybrid Work Arrangements
Bill Rossi, Owner of Rossi Enterprises, explained some employees enjoy working in the office and experiencing human interaction and connection, while others prefer to work remotely. The hybrid model is a great compromise for both types of workers.
“There [are] other people [who] truly miss that human interaction and connection and real-life water cooler situation,” he said. “I will say a majority of the people on my teams do prefer the hybrid [option] and are happy.”
Businesses looking to adopt a hybrid work model will better attract and retain existing talent. To ensure a smooth rollout of this model, Rossi recommends involving your existing employees in the decision-making process along the way.
“We sent out surveys to all of our staff … and asked them what they wanted, and we tried to accommodate the majority of the staff,” he said.
While accommodating employees and their preferences is important, business owners should also be clear about their expectations for staff regarding the hybrid model.
“You do have to measure productivity,” said Rich Crawford, CEO of TalentReef. “As an employer, you want to be clear about what the job is. It does place more of a demand on employers to be clear about what they expect from employees, and I think that's part of ... what makes a good environment and a good ... employer-employee relationship.”
Employee Stipends Can Help Deliver the Right Technology for Remote Work
Allen Clingerman, Chief Technology Strategist, Server+Workloads, and NA Channel for Dell Technologies, stressed the importance of being able to attract and retain the right talent — especially amid the current Great Resignation.
“It's extremely important to be as flexible as you can to make sure that you're bringing [talent] in and activating them back into the workforce,” he said.
This includes mobilizing workers with the right technology to allow them to work from anywhere.
“Technology is … extremely important because it does empower our business to do everything we're trying to accomplish in the remote workspace,” said Clingerman.
For business owners looking to accommodate remote workers, Clingerman suggested offering stipends for employees to supply the proper technology.
“Depending on the employee and how much we're paying them, we might provide lower-level employees stipends to give them a fully functioning home office because we're thinking about our physical real estate difference," he explained. "We're collapsing offices [and] ... taking advantage of the opportunity to never go back to the way it was."
Businesses Should Solidify Their Foundation Before Scaling
Small businesses often want to grow as quickly as possible, but they need a solid foundation and a proven model of success.
“Really start small before you go big [and become] operationally excellent on a small scale,” said Austin Allison, Co-Founder and CEO of real estate platform Pacaso.
To find smaller spaces to start in, Allison suggested entrepreneurs find a market where there is enough opportunity.
“Before you can scale up, it's important that the model is kind of working," he explained. "It's important that you have product-market fit … [where] people are interested in [and] willing to buy, and you have a model that delivers value for the customer before you start to scale it up.”
From the Series