The employee counts of businesses with fewer than 50 employees have decreased in three of the last four months according to data compiled by ADP, a national payroll company. In that same period, payrolls at larger companies increased.
The Entrepreneurs of those smaller businesses are blaming inflation as the main culprit of their hiring woes in an already difficult labor market. These difficulties are affecting the bottom lines of small businesses because they’re understaffed and unable to work at full capacity.
This is either hurting or eliminating profits altogether. According to a June survey conducted by Vistage Worldwide Inc, 63% of the small business owners surveyed said that hiring challenges are affecting their ability to operate at full capacity.
In order to combat this difficulty, 76% of small businesses have increased their wages and 44% added benefits to retain or attract more workers. Others are adding monetary bonuses to incentivize better work or performance. As always, when entrepreneurs can’t find decent employees, we step in wherever necessary to fill the gaps.
What’s happening to all of the workers who are leaving smaller companies? They’re being poached by larger organizations that can afford higher wages and larger benefit packages.
Please don’t be dismayed. In time everything will even out.
Small businesses always lead the way. Bad economies hit us before everyone else. This awful business environment will hit the larger companies as well. At that point, they’ll stop hiring and the labor market will once again settle down.
Let me leave you with this.
Yesterday morning, I was half-watching Face The Nation on television while getting ready to leave the house. They were interviewing the new administration’s lead guy on economic development.
When pressed on how the administration was planning to fight inflation, he again started promoting the Build Back Better bill that was summarily defeated in the Senate last year. I stopped dead in my tracks not believing my eyes.
The interviewer pressed him saying that they’d already lost on this bill and asked what new initiatives the administration had to solve the problems of skyrocketing inflation and supply chain nightmares.
He continued pushing various initiatives of the bill including raising our taxes, which was one of the hallmarks of BBB. Margaret Brennan, the moderator of Face The Nation simply looked at this man and made the most obvious statement I could have imagined.
She said, “Raising our taxes won’t affect the price of milk.” I stood there transfixed, having an epiphany.
The problem is that the new administration just doesn’t get it. As small businesses are being decimated by everything from inflation to an impossible job market, our executive branch wants to solve the problem by raising our taxes.
They were interviewing the new administration’s guy who’s in charge of solving our economic problems and his only answer was to again promote an already dead-on-arrival legislative package that raises our taxes. That’s their answer.
Bad economies are just another part of entrepreneuring. We’ve all been through these before. You need to have a comprehensive plan in place to combat these difficulties.
Watch your numbers. Raise your prices when necessary. Be conservative in your management approach. Maintain your margins.
This is all going to come down to us, and it doesn’t look like there’s any help on the way.
We’re all going to get through this. Let’s get through it together.
*Words from our exceptional leadership