Lack of working capital isn’t the only thing holding back small business owners.
Linda McMahon, head of the U.S. Small Business Administration (SBA), says that many small business owners are finding it difficult to find qualified workers to fill their openings. In particular, jobs in skilled trades like welding, carpentry, and electrical are sitting vacant.
This past April, 33% of small business owners reported having job openings that couldn’t be filled. This is good news for workers, as “economists expect wages to to rise in order for employers to satisfy their demand for workers.” But it’s bad news for small business owners, who are already are already competing with larger companies for employees and struggling to cover healthcare costs.
Economists say many of our hiring challenges are due to a changing workforce: “as baby boomers retire, millennials are not stepping in to fill these trade jobs.” Younger workers are pursuing education for more technical jobs like coding, social media, and engineering – which means there aren’t many qualified candidates for jobs that require specialized training but not a degree, such as construction, tailoring, tax preparation, and interpreting.
A shift toward flexible employment also plays a part in hiring challenges. The popularity of freelance, “side hustle,” and remote work has made the traditional 9-5 employed position seem less appealing.
And let’s not overlook our unemployment rate, which is at a 16-year low. The closer we get to “full employment,” the harder it is to match workers with job openings. This doesn’t just leave small business owners shorthanded – it also slows down economic growth. However, the unemployment rate is expected to rise over the coming months as displaced workers who have lost wages due to Hurricanes Harvey and Irma apply for aid.
Where does this leave small business owners? As those affected by the hurricanes rebuild and recuperate, others may see slower growth than they did in early 2017 and finding qualified workers to fill openings will continue to be a challenge.