Mar 31, 2019

Can Small Businesses Compete in the 2019 Job Market?

America clocked in a 3.9% unemployment rate at the end of 2018, an all-time low since 2008. The economy is bustling, businesses are hiring, and people are looking for better jobs. For small businesses, the search for good candidates is on, and the competition is fierce.

Breaking down the numbers

51% of small business owners plan to hire this year according to a recent survey of 529 entrepreneurs by Clutch. Not only are businesses expanding their roster, but they’re also planning to limit cutbacks as 57% say it’s unlikely they’ll fire or lay off employees this year.

The areas where businesses are planning to expand the most include sales and marketing (39%), customer service (36%), and IT (32%). Nearly one-quarter of small businesses (23%) plan to hire 1-3 new employees this year while 14% will hire a whopping 20 or more new recruits. Most positions small businesses will offer are full-time (74%), with only 40% looking to hire part-time workers. More than half of small businesses expect to hire for entry-level (56%) and mid-level (52%) roles.

Hiring difficulties in 2019

While hiring plans are indicative of small business growth, the search for qualified candidates may prove to be difficult. As of October 2018, there were approximately 1 million more job openings than unemployed people. This imbalance gives job seekers more power in the hiring process as they pick and choose between job offers.

Many businesses often fall behind in 2 areas: dedicated HR staff and attractive benefits packages. Nearly 72% of small businesses have only one person handling both HR and accounting. This drawback can be serious when it comes to attracting top talent.

Luckily, online tools are available that fix a lot of the issues associated with HR inefficiencies. Nothing can replace a dedicated HR professional with hiring experience, but digital solutions like JazzHR and Namely can help small businesses streamline their HR process so more focus can be put on hiring.

Another difficulty in hiring is understanding attractive hiring practices with regards to different generations. According to Brian Weed, CEO of Avenica, a recruiting firm that places college graduates in entry-level positions, newly graduated workers tend to be more focused on work-life balance.

“It used to be that salary and health benefits and some of the more financial-type things were more important. Now, the emphasis has started to shift to the mix of paid time off versus work days. That’s gotten more generous because balance is an important thing for these younger generations of workers,” says Weed.

For Generation Z, the rules are completely different. “Money is much more important, and they share with each other about what they make,” says Tracie Sponenberg, senior vice president of human resources at The Granite Group. “‘Joe says he makes $19 an hour and I make $18—why is that?’ they might ask.”

While each generation has its differences, health care is still a major concern for most workers. 56% of Americans say health insurance coverage is a key factor that influences whether they stay at their job. Many businesses choose to offer health benefits to both attract new employees and keep the ones they already have.

Hiring practices that work in 2019

According to the Wall Street Journal, “an entrepreneur’s best bet for finding employees is usually networking. Ask for referrals from your friends, industry colleagues, and advisers, such as your accountant, attorney, board members, and organization members. If one of your advisers or colleagues recommends somebody, they’ve done some of your employee screening work already. Startups typically find their first 10 or 15 employees this way.”

Once a business has found a few viable candidates, the next most important consideration is how well the candidates fit into the company culture. This aspect is especially true for firms looking to hire mid-level employees as these workers are likely set in a particular way of working.

Candidates who have spent a lot of time working for large corporations, for example, may fit poorly into a small business role due to the stark differences in policy and restrictions between them. Large businesses often have very specific rules and procedures to follow, whereas small businesses often require candidates to work outside their purview and set their own work agenda.

Get the best, keep the best

In September 2018 alone, 3.6 million Americans quit their jobs, according to the Bureau of Labor Statistics’ JOLTS report. For small businesses to offer competitive job opportunities, it’s imperative that they understand the specific, generational needs of current and potential employees.

Those companies that tailor their business culture to fit those needs will have no problem attracting and keeping talent in the competitive 2019 job market.

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About the author

Andrew Mosteller
Andrew Mosteller is a freelance writer and regular contributor to Lendio News. His upbringing in an entrepreneurial family nurtured a passion for small business at a young age. Andrew's father, an equity fund manager, taught him the ins and outs of investment financing. Now, Andrew spends his time writing copy for business owners, helping them expand and advertise their unique brands. He's also studying Strategic Communications at the University of Utah. When Andrew's fingers aren't glued to the keyboard, he spends his time reading, podcasting, composing music, and bombing down the ski slopes.

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