How small businesses are adapting to tightened labor market, wage demands
Yahoo Finance columnist Kerry Hannon joins Yahoo Finance Live to share how small businesses have adjusted to the ongoing labor shortage.
Video Transcript
SEANA SMITH: Hiring struggles have been a pain point for companies during the pandemic. Small businesses in particular are having an extremely hard time amid this very tight labor market.
Yahoo Finance's Kerry Hannon is here with more on this, and, Kerry, what is the hiring landscape here for small businesses?
KERRY HANNON: Yeah, hi, Seana. I have spent the last couple of days calling around small-business owners around the country, and I looked at the BLS numbers, and here's the thing. About 80% of the 10 million jobs that are currently open are for small businesses. I mean, we've got a tight labor market, and, overall, it's getting a little bit looser but not much. And for the small-business owners, it's been really a struggle trying to hire people. The thing is, you know, they've done the things. They've kind of cut back on their days or, you know, hours, all those kinds of things, but what it really comes down to is trying to find workers.
And I spoke to one woman in Youngstown, Ohio. She has One Hot Cookie is her store. And, you know, she told me, you know, the thing is I can hire people. She hired five-- four people in the last three months, but she only has one left. So it's really retaining them.
So the two things that seem to be coming into play here is-- and she raised her wages by $2 an hour to help attract people. So she said it's not so hard necessarily attracting but retaining.
And so what's happened is small businesses can compete in many cases on wages. They've really tried hard to stay-- to ramp up there, but it's the compensation. They can't offer the benefits that the big companies can offer in terms of, let's say, health care, you know, health insurance, or employer-provided retirement plans. So that's where they really fall back, and it really is quite a struggle for them right now and as we head into 2023.
- Yeah, and it may be difficult to characterize, Kerry, but what is the sentiment you're hearing among small-business owners right now?
KERRY HANNON: Yeah, Dave, here's the thing. They're optimistic. I mean, they truly are. A new study came out from the Bank of America that really looked at this, and they found that 66% of the small-business owners that they spoke to say that they're going to increase revenues next year. And about half plan to expand operations, and 2/3 say they're ready to weather a recession. So this is really fantastic, sort of an optimistic outlook for the small business given what they're struggling with.
And I'm going to just jump back to my gal at One Hot Cookie. You know, what she told me is that for her, you know, what she's done is she spent the past two years really ramping up her online business, her mobile unit. So she has more opportunities. She got a warehouse so that she was able to take advantage of price cuts, and so she has more supply-- so not as dependent on the supply chain going into 2023. So she's looking for a pretty good year in 2023 because she's taken these opportunities to really move her business forward so she is prepared.
- And because cookies are on fire right now. I think it was cupcakes, then it was boba tea, and right now cookies are everywhere, man. Kerry Hannon, good to see you. Thanks so much.
