Small Businesses Face Hiring Challenges Amidst Large Corporations
When it comes to hiring, can small businesses compete with their larger rivals? That’s the question on our minds as new numbers show that while small-business demand for workers is high, it’s stubbornly difficult to fill those positions. Larger companies have bigger wallets and more benefits to offer job seekers; inflation is slowing but still remains high, so it makes sense that folks are choosing to either leave their current roles for “bigger” pastures, or setting their job-seeking sights on the larger companies out there.
According to the federal Job Openings and Labor Turnover report that was recently published, companies with less than 1,000 employees posted the majority of job openings in February 2024. In March, job growth in the private sectorexpanded at its fastest rate since July of 2023—with companies adding 184,000 workers. This is great news for the economy. However, when you drill down into the data, we see the majority of this growth was from companies with more than 50 workers; small businesses added just 16,000 workers to the total.
Lots of speculation surrounds the discrepancy, with one theory being that competitive pay might be playing into things. For the workers who switched jobs in February and March of 2024, a pay increase of 10 percent was realized (compared to the same time last year); those who stayed in their current roles saw a raise of about 5 percent. And remember, most of those new jobs were with larger companies. The steepest pay increases in March were also at places with 20 – 499 employees. So, the speculation is that small businesses are struggling to hire because the larger firms are throwing out higher wages, and that makes a lot of sense. The market is tight, and it’s tricky for small businesses to lure workers if they’re struggling to compete with their big-wallet rivals.
Struggling to Hire?
If you’re a small business owner struggling to hire, this could potentially be the reason more qualified candidates aren’t knocking at your door. Small businesses are being squeezed the same way consumers are. And while high interest rates make it more difficult for small businesses to obtain loans, it pays to keep resources like ARF Financial in mind. We can offer larger loan amounts, fixed repayment terms, and funding in less than a week; with products like our Bankroll Revolving Line of Credit, funds can be used to hire additional staff (or provide increases to those you currently have). It might also be worthwhile to put money toward a marketing strategy aimed at attracting talent.
The Financial Pantry is a one-stop shop for business owners looking to learn about new laws, regulations, marketing strategies, and more—all geared toward small business entrepreneurs. Stop by today and see what’s happening in your industry. Then, check out our success stories to hear how ARF Financial has helped fund the success of owners just like you.
Your privacy is important to us. ARF Financial will never sell or rent your information to any third party. Click here for more information about our privacy policy.