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Small business owners say it’s getting easier to hire workers and keep them, hoping it’s a sign that the worst of the labor problems are behind them.
The U.S. job market has historically been tight. However, December marked the first time since July, when more small business owners said in a survey conducted for The Wall Street Journal that they found it easier — not harder — to find workers .
Measures such as higher wages, increased apprenticeship programs and rewritten job advertisements are starting to pay off, some entrepreneurs say. Others reported an increase in job seekers as competitors pulled back hiring or began laying off staff.
A “understaffed” recruitment sign. (iStock/iStock)
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Medical alert watch maker UnaliWear Inc. struggled this summer to keep new employees on the job. “They scare us,” said Jean Anne Booth, chief executive of 17 employees. “They’ll take the job, show up for a week, and then never show up again.”
This fall, the Austin, Texas-based company raised starting pay from $15 an hour to $18 an hour and added a $1-an-hour raise six months later, aiming to bring pay closer to the Other local employers are more consistent. “Right now, for the first time in a while, we’re overcrowded,” Booth said.
In the December survey, nearly 25% of more than 650 entrepreneurs said it was easier to fill job openings now than in early 2022 — up from 18% in November. Meanwhile, 20% said it had become more difficult to fill open positions, down from 25% in November. The survey was conducted for The Wall Street Journal by Vistage Worldwide Inc., a business training and peer consulting firm.
The shift is modest, as unfilled job vacancies continue to weigh on many small businesses. Of those surveyed, 56 percent said hiring challenges made it difficult to operate at full capacity. Eighty-four percent of small business owners report increasing wages in response to labor market challenges, and more than two-thirds report offering flexible hours and schedules.
A hiring sign is displayed at a restaurant in Rolling Meadows, Illinois, on Dec. 12. 27th, 2022. (AP Photo/Nam Y. Huh/AP Photo)
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In some industries, economic worries are creating opportunities to add talent. “We’re finding it’s easier, mostly because some of our competitors are slowing down,” said Dale Lemmons, owner of Signature Transport Inc. and Interstate Wood Products Inc., both The Kelso, Washington-based trucking company has about 125 employees. “The job market is not as hot as it used to be.”
Over the past 18 months, Lemmons has increased wages for entry-level truck drivers by 20% and by 40% for drivers with at least three years of experience.About 25 people took part in the paid apprenticeship scheme launched in January this year, and another Seven are currently undergoing training.
Chip Ridge, president of Millennial Title in Louisville, Kentucky, said he hopes to make strategic hiring in early 2023 as the housing and mortgage industry continues to contract amid rising interest rates and slowing sales.
“We’ve got a lot of pretty high-level talent in our industry that’s being displaced by this economic shift,” says Ridge, which employs 33. “It’s possible for us to get some really experienced talent, and in a normalized market we There will never be an opportunity to acquire these talents.”
At Water Tech Corp. in East Brunswick, N.J., an ad for a logistics position drew three applicants at the beginning of the year and then about 100 applicants this summer. “There are definitely more candidates, but we still haven’t seen the right candidates,” said Guy Erlich, the owner of about 40 employees who sells battery-powered vacuum cleaners for swimming pools.
Ehrlich believes the surge in applications reflects a hiring freeze at large companies. He expects the pool of more qualified candidates to rise in the coming months as big companies that expand logistics operations in response to supply chain shortages pull back due to excess inventory.
A “Hiring Now” sign hangs on the door of a small retail store in lower Manhattan on Jan. 1. April 2019 in New York City. (Drew Angler/Getty Images/Getty Images)
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For other small businesses, hiring remains as difficult as ever. Staffing shortages have led Doetsch Environmental Services in Warren, Mich., to often send a crew of three instead of four. The company, which specializes in cleaning underground sewer systems, has 50 employees and 20 job openings.
“We’re asking people to do more with less,” says Joe Schotthoefer, vice president of operations, fifth generation at the 124-year-old business.
Signature Transport in Kelso, Wash., has made it easier to hire truck drivers after raising wages and introducing an apprenticeship program.
Doetsch has raised starting salaries by about 30% over the past 18 months and has compressed the timing of the increases. It spends more time discussing company benefits and promotion prospects with candidates.
More and more candidates are responding to job postings, “but we’re still not getting them in for interviews,” Schotthoefer said. New, unqualified candidates want the same pay as employees with 10 or more years of experience, he added.
Competition from larger companies with more lucrative pay and benefits packages remains a challenge. D2 Solutions, a strategic consulting and technology firm focused on the hospital and life sciences industries, recently lost a senior sales executive to a pharmaceutical company offering a 40% raise. “It’s far more than what we’re paying them as a small company,” said Chief Executive Dean Erhardt.
A store sign outside a pizzeria on Nov. 11 in Voorhees, NJ. February 26, 2022.
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Overall, small business sentiment improved in December by the most in 21 months, according to the Vistage survey, and the National Economic Estimates showed the largest monthly gain.
Richard Curtin, an economist at the University of Michigan who analyzed the data, said the rise in small business confidence likely reflected moderating inflation as price increases for goods, services and other inputs slowed. He added that only the hiring program was the largest in nine months.
Steven Smithing, owner of restaurants Mere Bulles and Green Hills Grille in the Nashville, Tennessee, area, said more people are eating out more often. For the first time in a decade this Thanksgiving, he won’t have to visit his four children, ages 14 to 24, to help fill a holiday staff shortage. Compared with December 2020, hourly wages are up nearly 21%, he said.
“For the first time in a long time, I don’t need a manager,” said Smith, who has about 160 employees. “Suddenly I had more staff. It felt like we were starting to have some traction.”
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