Insider Research: See small business owners' perspective on hiring
Like many things, hiring over the past two years has looked very different from the way it was. Some industries have seen decreases in the number of employees they need, while others have had to ramp up quickly and struggle to find enough workers.
To learn more about the current hiring environment for small businesses, we surveyed 190 owners of businesses with 50 or fewer employees.
Who we surveyed
We sent an email survey to small business owners insured by Hiscox. Of the responses we received, 70% are sole proprietors, 23% have one to five employees, and 7% have six or more employees.
Twenty percent of respondents have hired or tried to hire in the last 12 months, and 28% plan to hire in the next 12 months.
When asked whether hiring was more or less difficult that it was two years ago, just 6% said it was easier. The rest of respondents were evenly divided as to whether it is harder (47%) or the same (46%) than it was pre-pandemic.
Independent contractors can help bridge the hiring gap
With permanent employees hard to come by, many small business owners are turning to independent contractors. Forty-five percent of those surveyed said they use freelancers or independent contractors (those paid on a 1099 form, not a W-2). Half of the respondents who use contractors noted that it’s no easier or more difficult to find them than it was before the pandemic. About 30% said it’s harder to find contractors now, and about 20% said it’s easier than it was two years ago.
Prospective employers are making changes to hire employees
Most of those respondents who have hired or expect to do so recognize the need to make changes to hire in this environment, with nearly 70% indicating they have done or will do at least one of these things:
- Offer more flexibility
- Offer higher salaries
- Offer more or better benefits
- Something else
The most popular way to attract new employees is to provide more flexibility, with 42% of respondents indicating they are offering remote working, unlimited vacation, four-day workweeks, or other flexible work options.
One quarter (25%) of respondents said they are increasing salaries to attract talent, and 10% are providing more for employees, such as health insurance, a retirement plan, or other benefits.
One respondent indicated that employee satisfaction is key to their ability to attract and retain talent. When asked what they have changed or are changing to attract new employees, they said, “Working on services and products that add positive social impact to the world. Our employees love making a difference.”
Thirty percent of respondents say they are making no changes.
Related: 4 Ways to hire top talent – even now
Workers are looking for flexibility
When asked what one thing they think prospective employees are looking for in a position, the most popular answer (44%) was flexibility, which included the ability to work from home or flexibility in days and hours worked.
Another popular choice was competitive salary, cited by 26% of respondents. However, one respondent indicated that it’s not enough to be competitive – job seekers want a higher salary than what others are offering.
Thirteen percent of respondents indicated that job satisfaction is most important to job seekers, and company culture was mentioned by four percent.
One respondent indicated that today’s job seekers are looking for all of these things. “In the past, we would have said salary, but not today. Not during the Great Resignation and Great Awakening. You have to have it all – company culture, leadership committed to positive social change, job satisfaction, good benefits, flexibility. Also, younger generations care about diversity. Pay attention to what your employees care about. ”
Retaining employees is less of a concern
When asked about changes they are making to reduce employee turnover, 70% of respondents said they are not doing anything differently.
But for those making changes to reduce turnover, the priorities were similar to those being used to hire new talent. Nineteen percent are offering greater flexibility, 13% are raising salaries, and 6% are providing increased or better benefits.
Competition for workers is fierce
When asked what has been easy or difficult about hiring recently, these small business owners had plenty to say.
Several mentioned the demand for qualified candidates as being a hiring challenge.
“My industry is booming and there simply aren’t enough people out there to fill positions.”
“In general there is a lack of skilled and trained labor force.”
“Low unemployment and competition with gigs like Uber, GrubHub and Lyft”
“Finding capable individuals who are interested and available”
But technology makes it easier to find candidates; according to one respondent, who said, “With all the online places you can post jobs for a reasonable fee, it’s easier to get your job listing seen by a lot of people (LinkedIn, Indeed, freelance sites).”
Some respondents cannot provide what employees are looking for, making hiring a greater challenge.
“It is difficult to attract quality candidates with our budgets.”
“The flexibility to work at home for my line of work do(es) not exist. And more prospective employees are looking for that.”
“There is a desire for a greater package just to start. Higher pay as well as flexibility and benefits.”
“The difficulty is how competitive the market is, not just in terms of salary and benefits, but in company policies and the importance of company culture.”
Employers who can offer what employees want are finding it easy to hire. One respondent said, “Everyone is looking for virtual and flexible opportunities which has made it easier to attract and find great talent!”
Finding the right person for the job
Recognizing that candidates may have different priorities than they’ve had in the past is the first step. Next, consider your ability to offer what’s being requested. The most popular requirement, flexibility, can take a lot of different forms. If you cannot offer remote work, perhaps you can offer a four-day work week or staggered shifts. Asking what the candidate is looking for – above and beyond salary – is an excellent place to start.
Whether you are looking to hire, have the right staff now, or are a sole proprietor, be sure to protect your business with the right insurance. You can get a quote in minutes and be covered today.