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Small businesses struggle to hire even with improving unemployment rate

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Posted at 10:01 AM, Aug 23, 2021

Hiring signs are easy to come by these days as many small businesses struggle to keep full staffs.

Workplace Resource is among them. It's a small business that provides anything and everything to furnish other businesses.

“We deal with businesses of all sizes,” said Carla Dore, the CEO of Workplace Resource.

Right now, they have a number of jobs open and they work every day to find the talent to fill those positions.

“I’ve thought a lot about whether or not it's harder for small companies than large companies to find and attract people. We try to offer the same types of benefits large companies do but at the end of the day, it's hard to do that,” she said.

Right now, the market is filled with open positions and not enough workers to fill them.

“In these types of markets, employees have their choice,” Dore said.

She said working for a small business like this has its perks.

“We are just so much more flexible about what needs to happen in a day's time,” she said.

But recent data shows that’s not what employees are thinking.

A U.S. labor statistics report released in early August shows the unemployment rate went down from 5.9% to 5.4% in July. However, a closer look at the numbers shows small businesses are losing more employees than larger businesses, and larger businesses seem to be hiring faster.

“Where we see the struggle with small business and have been for a very long time is in regards to an uneven playing field when it comes to tax structure, as well as the benefit structure that larger corps are maybe able to offer,” said Brian Pifer, VP of Programs and Research at Small Business Majority.

Small Business Majority is a small business education advocacy organization. He says small businesses face a number of challenges including large business competition.

“Definitely some shortage of labor pool,” Pifer said.

It’s something they’ve been monitoring for a while.

“We’ve been conducting surveys throughout the pandemic around how small businesses have been affected by the pandemic,” he said. “32% say they are increasing pay as a way to attract new talent.”

But increasing pay isn’t an option for every business.

“Those competing job opportunities, it's just really hard to skip on an opportunity for 17 bucks with benefits in comparison to a small business who is even struggling right now to cover costs for an employee,” said Astrid Villalobos with Guacamole’s Mexican Restaurant.

This family-owned Mexican restaurant is facing the challenge of finding workers.

“Our prices and our salary hasn't just had to increase, we've had a lot of effects like the groceries and produce we have to purchase. That has all increased,” she said.

And while they’ve fought through the pandemic, they are unable to offer some benefits bigger businesses can.

“If you can't be creative about things like PTO and leave and sick time and 401K and all kinds of other benefits. It’s really tough to compete,” Dore said.

“Competing with bigger firms is always gonna be a problem,” said Stephan Weiler, an economics professor at Colorado State University.

He says people tend to spend shorter periods of time in small businesses.

“Part of it is rooted in job turnover. There's just much more job turnover in small businesses and that links back to the hiring problem.”

Small businesses are pooling whatever resources they can to hire talent.

“There have been times where it's been difficult to find people but not like this, and not with the flexibility that employees are requiring these days,” Dore said.