Seventy-five percent of U.S. small business owners say they are being impacted by inflationary pressures— prompting them to modify their practices in order to grow, according to a new study.
A report by Kabbage from American Express shows revenue for small businesses has nearly doubled year over year for the month of July, but profits have remained flat. This could partly be due to higher wages and better benefits to attract talent.
“The data is showing that inflationary challenges are impacting hiring and talent retention — 47% of all small business respondents reported that inflation is impacting their labor market by pushing them to accommodate and compensate for higher health care, enriched employee benefits and more frequent pay raises,” said Brett Sussman, VP head of sales & marketing for Kabbage from American Express.
Businesses are also “leaning into new ways of working by offering hybrid and remote work options," said Sussman.
The study coincides with reports of small businesses struggling to attract talent amid a resilient labor market.
Almost half of the study's respondents have started offering flexible work options to stay competitive in the labor market with hybrid work (27%) being the most popular option.
The Small Business Recovery Report polled 550 business leaders. A previous June study showed 80% of small businesses were confident they could withstand a potential U.S. recession.
Ines is a markets reporter covering stocks from the floor of the New York Stock Exchange. Follow her on Twitter at @ines_ferre
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