With unemployment at its lowest level since 1969, job applicants may have the upper hand when they walk into an interview, and that goes for job offers on Main Street as well as from corporate human resources.
It is not just the Amazons of the world feeling the pressure to offer employees more. Small businesses across the United States are upping the ante in the attempt to get the candidates they want. Will they succeed? They haven't been able to for months, and the answer to this question is important to the domestic economy.
In the new CNBC|SurveyMonkey Small Business Survey for the fourth quarter, business owners desperate to fill positions are shifting resources to entice potential employees, including taking a financial hit in order to staff up. After all, nearly 1 in 5 small-business owners (18 percent) have open positions they have been unable to fill for at least three months, ticking up two percentage points from last quarter.
More than half of small-business owners in the survey (56 percent) say they've offered to pay higher wages in order to attract qualified workers to fill open positions. Another 31 percent say they've offered to pay for training or additional education to help underqualified candidates meet job requirements. Twelve percent have offered to help candidates pay off student loans.
The shift toward greater worker compensation is more palatable because, by and large, Main Street is still doing steady business. More than half of small-business owners responding to the survey say current conditions for their businesses are "good." Small-business owners who say things are "good," "middling" or "bad" are nearly equally likely to say they're having trouble hiring workers, indicating that the problem is widespread.
Not all investments in recruiting are financial; sometimes they involve making changes to the way a business is typically run. A small but still substantial number of small-business owners say they've cut back on some of their hiring standards in order to fill open roles, with 14 percent saying they relaxed their company drug policy and 12 percent saying they considered candidates with criminal records for the first time.
Other small-business owners report making different sorts of compromises. Just over a quarter (27 percent) have offered benefits "beyond what has typically been available to other employees," and another 19 percent wrote in descriptions of the different ways they're trying to attract good workers. A few common themes emerged:
Workplace flexibility. "Flexibility with hours" and "flexible work" emerged as frequent write-in responses. Some small-business owners added that their workers had parenting commitments or schedule needs that they wanted to accommodate. Flexible hours and telecommuting options have grown in popularity, especially as millennials have come to dominate the workforce.
On-the-job skills. Some small-business owners mentioned "mentoring" and "apprenticeship programs" as extra incentives they could offer new hires to help get them up to speed.
Miscellaneous. Every small business is different, and the different incentives they have to offer reflect that. One small-business owner said they secured an H-2B visa for a new hire. Another mentioned reducing the regular workweek to four days to create a three-day weekend. Small-business owners have a much greater degree of control over their HR policies than large corporations, and they clearly are using that to their advantage in order to win over new hires.
Hiring expectations dipped this quarter, with the percentage of small-business owners who expect to increase their staff in the next year slipping from 33 percent to 29 percent. This four-percentage-point decrease mirrors the four-percentage-point increase (from 28 percent to 32 percent) in hiring expectations we saw from the fourth quarter of 2017 to the first quarter of 2018.
That increase was largely attributable to the passage of a tax-reform bill that significantly boosted overall confidence among small-business owners. This quarter's decrease coincides with several others, including a four-percentage-point dip in the percentage of small-business owners who expect revenue growth in the next year (from 62 percent to 58 percent) and a three-point decrease in the percentage of small-business owners who say the current conditions for their business are good.
The past three quarters have been a boon time, with small-business confidence still near record highs. If this survey is an indicator, the time for workers to see substantial bump-ups may be imminent.
— By Laura Wronski, senior research scientist, SurveyMonkey, and Jon Cohen, chief research officer, SurveyMonkey
The fourth-quarter CNBC/SurveyMonkey Small Business Survey was conducted more than one week after the midterm elections, between Nov. 19 and Nov. 29, across a population of more than 2,100 U.S. small-business owners.