SMBs are struggling to hire in our competitive labor market—here’s how they can move forward.
SMBs, small- and medium-sized businesses, have been among the hardest hit during the pandemic. While large businesses tend to have access to cash flow to cover their expenses, many smaller businesses operate within tighter margins. As the economy suffered during the early months of the pandemic, many SMBs struggled to stay afloat, laying off employees and cutting back on operations due to labor and supply chain problems.
In fact, the OECD calculated that 70-80% of SMBs saw revenue fall between 30 and 50%. And though the economy is recovering, research shows that some who previously considered themselves self-employed (many of whom are small business owners) have not returned to their previous line of work. This suggests that for some small business owners, the cost of lost revenue and instability during the pandemic was too much to bear, and they have left to return to traditional employment.
Mixed economic indicators for SMBs make assessing the situation complicated. Let’s dive into some key findings from Checkr’s recent research in the SMB Hiring and Fair Chance Report, to understand where SMBs currently stand and what they can do to build back their workforces.
SMBs are struggling to fill roles
In recent months, as we’ve seen the pandemic wane and the economy begin to grow again, SMBs have once again been impacted by new workplace volatility, this time in the form of labor shortages. The Great Resignation, as many have called it, is the social trend causing millions of Americans to quit their jobs, often without a new job in place or even plans to search for one.
For multiple reasons, including The Great Resignation, many jobs remain open, with employers unable to find qualified candidates willing to accept a job. This has created a candidate’s market, in which job candidates are largely able to set their own terms of employment. Candidates are asking for remote work options, as well as better pay and benefits.
SMBs are struggling to find candidates to fill roles in this challenging labor market. Our research found that:
- 1 in 3 SMBs have between 2 and 5 positions open
- 1 in 4 SMBs have between 6 and 10 positions open
- 36% of SMBs we surveyed reported that it takes 3-5 weeks to fill open roles
A report from Indeed found that 82% of SMBs have had difficulty hiring in the last several months, compared to 75% for larger companies.
What actions are SMB leaders taking to move forward through this labor crisis?
SMBs are investing in benefits to attract and retain talent
Our research found that SMB leaders are taking note of candidates’ job priorities and adjusting their benefits and corporate policies accordingly. According to our survey, 4 in 5 SMBs plan to add benefits to attract talent by:
- Raising salaries (94%)
- Offering flexible work schedules (92%)
- Offering childcare benefits (86%)
This is great news. Today’s candidates need and expect these updated benefits. Staggering inflation over the last year has caused the cost-of-living to rise significantly, and after many months of so many employees working from home, some candidates simply won’t accept a job that doesn’t allow them to work remotely.
A survey from LinkedIn found that among those considering leaving their jobs, better compensation, better alignment with their values, and more opportunities for growth were the top three reasons for seeking a new position (54%, 48%, and 44%, respectively). Flexible (36%) and remote work (34%) options were also priorities for job seekers, with women reporting being significantly more interested in flexible working arrangements than their male colleagues.
While adding benefits is a good idea, this change alone might not be enough for SMBs to find qualified candidates to fill open roles.
SMBs can look to fair chance talent to fill job vacancies
SMB leaders are overlooking one of the best ways to widen their talent pool: by adopting fair chance hiring practices. Our research found that only 1 in 5 (20%) SMB leaders are very open to hiring someone with a criminal record.
We know that smaller businesses place a premium on safety in the workplace, but fair chance hiring doesn’t mean that employers have to sacrifice safety concerns. Fair chance hiring doesn’t eliminate conviction history as a factor for consideration; rather, it delays this discussion to the end of the application process, allowing candidates the opportunity to contextualize anything relevant.
It’s also worth noting that businesses that apply fair chance hiring benefit from the process. Fair chance talent outperforms others in many categories, showing great retention and promotion rates. Fair chance hiring is profitable and it benefits both the economy and society by breaking the cycle of recidivism and offering formerly incarcerated individuals the opportunity to participate in meaningful work.
SMBs are struggling to hire in this difficult labor market. With fewer resources than large companies and lingering suffering from the uneven economic impacts of the COVID-19 pandemic, SMBs will have to get creative to find a solution. Leaders should look to fair chance talent for qualified and capable candidates.
Learn more in the SMB Hiring and Fair Chance Report
In the State of SMB Hiring and Fair Chance Report, you’ll learn:
- Where SMBs are making investments in 2022
- Strategies SMBs are deploying to create a diverse workforce
- Executive perspectives on hiring system-impacted individuals
- The top characteristics SMBs look for in a candidate
- How to incorporate fair chance hiring at your SMB
Download the report now for more insights on why and how to incorporate fair chance hiring into your team’s hiring policies.