Main Street Businesses Navigate the Current Labor Market
Labor issues were at the forefront of news this summer, affecting industries big and small. With a potential autoworker strike and the impact of the screenwriter and actor strikes on studios and small businesses supporting the entertainment industry, many business owners have been closely following the headlines this summer. While economists remain optimistic about the labor market, small businesses on Main Street face ongoing difficulties in hiring and retaining workers. Our most recent Insight Report, which tracks the health of the small business economy across the country, showed that attracting quality candidates for open positions remains a struggle for many business owners.
Main Street Businesses: State of Labor
Quarterly, BizBuySell surveys business owners, brokers, and buyers on the state of small businesses. Over the last few quarters, owners have been sharing that the labor market remains challenging. While conditions are improving from a few years ago, nearly 50% of business owners surveyed report that it is not easier to hire or retain employees at a reasonable rate. It has become increasingly difficult to find and keep qualified employees due to a variety of factors. Many business owners are struggling to keep up with the rising costs of inflation, making it difficult to offer competitive wages to their employees. Business owners also report that the inability to offer medical insurance hinders the ability to attract quality applicants. Due to a shortage of skilled trade workers, business owners in certain industries are finding it challenging to find replacements for retirees. To address the challenges of the current labor market, business owners are exploring creative solutions, such as adjusting working and operating hours and leveraging AI for certain mundane tasks.
A Look Ahead: 2023 Labor Trends for Small Businesses
As the Federal Reserve continues its efforts to tame inflation, the most recent job numbers report provides some welcome news for the economy and small business owners. The Labor Department reported that unemployment rose to 3.8% as employers added 187,000 jobs in August. They also shared that pay gains are easing, with American workers getting smaller pay increases in August. Nearly a third of business owners surveyed in the Insight Report intend to hire in the near future, requiring a careful balancing of the effects of interest rate hikes and a labor market that is both robust and slowing. With more job seekers on the lookout for opportunities, small business owners may have an easier time finding employees in the remaining months of 2023.
Small business owners must remain adaptable and search for new, creative ways to attract talent in the constantly evolving labor and economic landscape. Having a trained and experienced workforce is not only essential for the day-to-day running of a business, but it also boosts the value of a business. A business owner who understands how the economy can impact the value of their business can make informed decisions about growing and selling their business.