NEW YORK ( Associated Press) — Some small businesses are still struggling to hire qualified workers, even as Americans return in large numbers to the American job market.
Hiring and retaining employees is the biggest challenge small businesses face, according to a survey of 10,000 Small Business Voices of 1,100 businesses conducted last week by Goldman Sachs. Ninety percent of the businesses that are recruiting are finding it difficult to recruit qualified candidates for open positions.
In general, the US job market is burning. An unexpectedly strong recovery from the brief but devastating coronavirus recession has left companies to recall workers they laid off in the spring of 2020 and to find new ones. In the past year, American employers have added an average of more than 540,000 jobs a month. According to FactSet, the Labor Department is expected to report Friday that employers hired another 396,000 over the past month.
But small businessmen believe the job market is a tale of two recoveries. Eighty percent of respondents to a Goldman Sachs survey say small businesses are struggling relative to larger companies in their local communities. Forty-two percent say they have lost employees at larger businesses that are paying more.
“Small businesses are struggling to compete with large employers on pay and benefits, and citing a lack of qualified workers,” said Joe Wall, national director of Goldman Sachs 10,000 Small Business Voices.
Data from payroll processing firm ADP show a wide gap in hiring between businesses with 500 or more employees and businesses with fewer than 50 employees. Those small businesses have lost jobs in three out of the last four months.
In March, employers advertised a record 11.5 million job openings. There are now two job opportunities for every unemployed person in the United States. But a large number of small businesses say they are having trouble finding candidates to apply for openings, especially in the hard-hit leisure and hospitality industry. The owners themselves are doing more and improving other ways of achieving.
“I’m worried about burnout. … It’s frustrating, very depressing,” said Shirley Hughes, owner of Sweet Cheats Bakery in Atlanta.
Sweet Cheats had nine employees at the peak of the pre-pandemic. Now Hughes himself has two pluses. She has reduced working hours—closing hours from 8:30 p.m. to 6 p.m. and now 4 p.m.—giving her and her two bakers more time in the kitchen. Still, Hughes says she now works 80 to 90 hours a week.
Inflation is another challenge. High expenses not only hurt businesses’ bottom lines, but also affect how well they can retain and attract workers. Before the pandemic, Hughes would get hundreds of applicants for the opening. Now, she says she’s lucky enough to have one or two, and they want $18 or $20 an hour, when she offers $14 or $15 for experienced bakers.
Hughes has had to add benefits for his two longtime employees to hang on to him.
Teresa DePola herself is overworked due to the lack of available support. She opened Betty Boops Diner with her husband and son in Albany, New York, 10 years ago, and continues to run it after she and her husband divorced.
While she’d ideally have three employees to run the place, until recently she’s been a one-man workforce: cooking, waitressing, and even running deliveries.
“It’s small enough so I can do it myself, it’s not bad,” she said. Still, she wants to add some staff so she can serve dinner again. She has been serving only breakfast and lunch and is closing at 3 pm since the pandemic began. And she doesn’t see an improvement in the job picture anytime soon.
“I don’t think that’s going to change for a while,” she said. “I’m going to keep it the way it is now, people just aren’t ready to work. I’m still having a lot of trouble finding staff.”
Most major US industries have recovered jobs lost from the pandemic, with employment in leisure and hospitality down 1.5 million, or 8.7%, since February 2020, according to the Bureau of Labor Statistics.
Rob Wilson, president of human resources provider Emploco, said many people in the industry faced burnout after being on the front lines during two years of the COVID-19 pandemic. Some who remained in the industry moved to larger restaurants where wages could be higher. Others left and looked for new opportunities.
“There’s no one to rent, no one out there looking for a job,” said Anesh Bodasing, who opened Tiffin Box, a fast-casual Indian restaurant in West Palm Beach, Florida, in 2019 with 20 employees.
Last year in April 2021, Bodasing temporarily opened a second location in a food hall. But then the shortage of staff started hitting the house.
“Your employee levels went down and you’re paying people who are paying. From an employer’s point of view, it’s the wrong equation,” he said.
Bodasing closed the food hall stall and the West Palm Beach location is down to three employees. He is considering changing the business to use fewer employees.
“Let’s assume that the lack of employment will not change,” Bodasing said. “You can sit and struggle or pivot and turn the business around in a way that moves us forward even during times of shortage.”
One option is to replace the cashier’s position with an automated kiosk, which lets customers order and pay. Another possibility: introducing meal planning, where customers order at least five meals in advance that they can eat or freeze.
“You just have to think outside the box; literally nothing is off the table,” he said.
Matt Ensoro, founder of Wing It On! Chicken Restaurant, the company’s two corporate restaurants in Waterbury, Connecticut, and Raleigh, North Carolina, faced the challenge of hiring an entire staff of 35 employees. (The chain also has 9 franchise locations with further developments.)
“We thought, this is pervasive in our industry, we have to change our strategy,” he said. Ensoro realized he was competing with other restaurants to get applicants in the door—people would schedule an interview and then not show up 90% of the time. So, the chain started giving people a free lunch or dinner if they showed up. The ratio “flip-flopped” he said, and most applicants came in for interviews.
Meanwhile, at the Raleigh location, which is near North Carolina State University, the company began offering workers scholarships: $1,000 if they worked a full year, or $500 if they worked a semester. The program was successful, and the company plans to increase that to $2,000 next year for full-year employees.
“It’s not something that’s a foregone conclusion now that you can put up an ad and people will walk through the door, and you’ll hire them,” Ensoro said.