We recently outlined the biggest HR trends for 2020, noting how HR’s role is shifting (from transactional to advisory), how businesses are adapting (emphasizing employee experience and workplace flexibility), and what challenges are looming (hiring and skills development). But what are the trends and challenges facing small employers specifically?
Recruiting Remains A Major Challenge
The Goldman Sachs/Babson Voice of Small Business in America 2019 Insights Report found that hiring and retention are the top challenges reported by small business owners, with 76% of respondents indicating difficulty. Additionally, nearly two-thirds are failing to find the skills they need within the applicant pool – a 50% increase from 2016.
- Worth thinking about: with unemployment at historically low levels, the talent pool is scarce, and small employers are competing with large enterprises for workers. A PEO can help small businesses access enterprise-grade recruitment, benefits, and payroll options.
Compliance Is (Still) A Growing Burden
The Goldman Sachs report also found that regulatory compliance imposes a significant burden on small business owners, with labor laws the most commonly cited challenge. Over 60% say regulations negatively impact growth. Respondents also say they spend six hours a week on compliance-related tasks (or over 300 hours a year) – again, an increase from previous years. And the vast majority (85%) of small business owners handle compliance themselves.
- Worth thinking about: time spent on compliance is time spent away from business development and growth. If small business owners can outsource some or all of their compliance activities, the drag on their business would likely be mitigated.
U.S. Trade Policies Are Hitting Small Business Owners
The Fall 2019 Bank of America Small Business Owner Report says, “Over the past year, more business owners say they have been impacted by U.S. trade policies.” In fact, nearly half (44%) report feeling the effect of tariffs in the cost of goods and supplies and higher customer pricing. In short, tariffs are increasing the cost of doing business
- Worth thinking about: if external factors make running a business more expensive, it makes sense to explore alternative ways to decrease costs. Outsourcing can make a small business more efficient, while allowing the owner to focus fully on growth.
CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about our ability to create a strategic HR function in your business that drives business growth potential, contact us today.