Wizehire, an end-to-end hiring solution for growing small and medium-sized businesses (SMBs), recently released its 2024 Small Business Report. The study surveyed 1,000 small business owners and operators, ranging from 10 to 200 employees. This research provides insights into hiring challenges, business growth, and people management in the evolving landscape of small businesses in 2024.
Small Businesses Forecast Growth for 2024
Federal reports expect job growth and the economy to be sluggish in 2024, but Wizehire’s survey revealed many SMBs plan to expand. Ninety-six percent of employers plan to hire within the next six months, with 80% looking for full-time hires, 50% hiring part-time employees, and 30% filling roles with contractors or freelance work. Eighty-four percent of businesses are very likely or somewhat likely to give out raises this year, another positive indicator of small business growth and optimism in the United States.
Digging into Recruiting, Hiring, and Retention
Wizehire’s findings highlight the most effective recruitment practices for small businesses. Employee referrals were the top recruitment method for nearly half (49%) of businesses, closely followed by job boards (45%) and business career pages (44%). When onboarding new hires, 44% of businesses leverage a dedicated HR department, and 27% have at least one dedicated HR staff member.
Thirty-six percent of businesses were generally satisfied with the quality of their job candidates, but 30% acknowledged that finding suitable applicants was time-consuming. Moreover, 22% believe there’s room for improvement regarding talent quality, highlighting the need for more strategic approaches in recruitment.
While 25% of businesses shared that high turnover significantly impacts their business, another 25% manage to refill positions quickly. It is important to note that most of those surveyed are in the retail (18%), food service (14%), or home service (13%) industries, which are known for their high turnover rates. On the upside, 28% shared they have a good employee retention track record.
Snapshot of Small Business Performance
Although small businesses plan to hire, many face challenges with stability and growth due to inflation on spending and market competition. Thirty percent expressed uncertainty about the economy and consumer spending, and 41% felt pressure from increasing market competition.
However, 62% experienced growth over the past year, with less than 1.5% of small businesses needing help to stay afloat. A mere 9% observed a decline, but another 8% mentioned their business did experience a decline but is now rebounding.
Recruiting Obstacles Facing Small Businesses
Recruiting top talent is one of the biggest obstacles for SMBs, with 43% of businesses struggling and 41% facing stiff competition for highly qualified candidates. Additionally, 35% of businesses identify employee retention as a significant concern
Alongside these primary challenges, businesses and business owners also face secondary obstacles. Thirty-four percent noted that limited resources for employee training are particularly concerning—possibly restricting the development and upskilling of new and existing staff. Funding to deal with increasing wages and inflation is also a problem (30%), with one respondent sharing, “People are seeking the highest salary even for non-high-paying jobs.”
Other challenges small businesses face are the need for more qualified candidates (29%) and the waste of resources from candidate ghosting (24%). These issues add unexpected complexity to the hiring process, possibly slowing business growth.
Small Businesses Are Building Inclusive Company Cultures
The study also revealed that a significant majority of small businesses, 88%, prioritize building inclusive company cultures and valuing diversity, equity, and inclusion. Nearly half (46%) have taken proactive steps to implement employee diversity training, and 45% foster a diverse leadership team that actively promotes individuals from diverse backgrounds to higher positions. Nearly 40% of businesses regularly host open discussions and listen to employee feedback on diversity and inclusivity matters.
Summary
Wizehire’s 2024 Small Business Report reveals that small businesses are optimistic about their growth prospects, with most employers planning to add talent to their teams in the next six months. Despite the obstacles small businesses face, such as limited resources for employee training and increasing competition for highly qualified hires, the study highlights that many small businesses are building inclusive company cultures and taking proactive steps to implement employee diversity training. To learn more about the current trends and challenges in hiring and people management for small businesses, read the full report.
Methodology
All figures, unless otherwise stated, are from Pollfish. The total sample size was 1,000 adults in the US who own (86%) or are responsible for running a small business (14%), ranging from 10 to 200 employees. Most businesses evaluated had a team size of 10 to 20 employees. The survey was distributed online between April 3, 2024, and April 15, 2024.
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