Small Business Owners Stretched Thin as They Struggle to Find Quality Candidates
While unemployment has declined, there remains a lack of skilled and experienced candidates in applicant pools. More than 40% of small business owners say they have been actively searching for new hires in 2018, but are having difficulty finding quality candidates. Among businesses looking for talent, 20% rate potential recruits as poor quality (compared with 25% in Q2 2017) and 35% rate the quality of candidates as fair. Thirty-four percent of small businesses rate candidates as good (compared to 28% in Q2 of 2017) and just 9% say they are very good. Since the inception of the SBI in Q2 2017, there does seem to be some improvement in quality of recruits.
Small businesses are feeling the strain of not having the staff they need. 81% say they have to work longer hours or take on more roles to compensate for their inability to find qualified candidates. This is especially pronounced among businesses run by women (86%), minorities (89%), and millennials (95%). Among this group, most say they had to push their staff to work longer hours (61%) and over half say they are investing time and money into training their current employees as a way to compensate for not finding new recruits. Over a third say they relied on help from family and friends to make up for staffing needs. This proportion spikes to over half within the service industry, businesses staffed by fewer than five employees, and those owned by millennials.
As reported in Q2 2018, small business owners work nearly double the hours of the average American worker (14 hours vs. 7.8 hours daily), likely exacerbating their struggle to strike a healthy work-life balance.
Manufacturing businesses seem to be having a particularly difficult time finding qualified candidates compared to other industries. 78% report it was hard or very hard to find candidates with the right skills (compared to 67% across all sectors).
On experience, 81% of manufacturers looking for new employees say it was hard or very hard to find candidates with the right experience (compared to 69% across all sectors). These Small Business Index findings are consistent with a recent study conducted by the Manufacturing Group and Deloitte, which found that manufacturers report a sizeable gap between the talent they need and the talent they can find.
The data shows that businesses in the manufacturing sector report that the quality of candidates is improving, however. Thirty-eight percent of small business owners in manufacturing rate candidates as good or very good in Q4 (compared to 27% in Q2 2017) and 22% rate candidates as poor (compared to 31% in Q2 2017)