The NFIB Small Business Optimism Index remained almost unchanged in December, drifting down 0.4 points to 104.4. In the NFIB’s survey, there were reports of higher worker compensation, and inventory investment plans surged.
However, sales growth accounted for a decline in the index, while a lack of qualified applicants to fill vacant positions continues to be the primary driver of small business concerns across the state, according to the report.
“Optimism among small business owners continues to push record highs, but they need workers to generate more sales, provide services, and complete projects,” NFIB President and CEO Juanita D. Duggan said. “Two of every three of these new jobs are historically created by the small-business half of the economy, so it will be Main Street that will continue to drive economic growth.”
Mark Bays, director of the East Tennessee State University Small Business Development Center, said the need for workers cited by the NFIB seems to be a key concern among employers not only locally, but basically everywhere.
In Tennessee, a record 39 percent of small business owners reported job openings they could not fill in the current period. Sixty percent of owners reported hiring or trying to hire, while 90 percent of those reported few or no qualified applicants for the position. Twenty-three percent of owners cited difficulty in finding and hiring qualified workers as their single most important business problem.
“I see clients all the time, and it seems like one of the hardest tasks is finding qualified people to fill the openings,” he said. “A lot of high turnover rates is something we’ve been seeing, as well.”
For many small businesses, the owner needs to find their “number two,” or a manager to help get the business started. Finding someone with the necessary skills for this can be tough, Bays said.
“I think a lot of the small business owners are willing to train the person who is willing to be teachable,” he said, adding that finding the right person who takes initiative is where the challenge often comes into play. “That’s often very difficult to find and keep.”
Another factor that affects the hiring process and worker retention is incentive. Things like fairer wages, benefits and cohesion within the company all play into this, Bays said. He said he has noticed workers from fields ranging from landscaping to medical administration leaving positions for better pay and benefits.
“That’s a factor that drives all of us. It’s the carrot that dangles that keeps us moving forward,” he said. “And you’ve got to feel like you’re part of a team.
“At the end of the day, if we have pride in the work we’re doing, and we are getting paid our worth, we are happy with that,” he continued. “If you feel like you’re getting paid too little, it’s temporary at that point, and you hit burn out.”
Bays said it’s also important for employers to continue to “focus on the hiring process.”
“Sometimes, they find one person and don’t start looking for other people, and that person just doesn’t meet the mark,” he said.