The Lucas Group SMB Job Generation Outlook is an innovative approach to traditional hiring and employment surveys, gauging both recent and planned activity in the United States small to mid-sized business market. This, our sixth national survey of SMB executives, examines top-level perspectives on critical issues facing the American SMB marketplace, including economic developments, employment trends, legislative initiatives, political environments, and the tangible impact these issues have on business and employment planning.
The SMB Job Generation Outlook has surveyed more than 1,500 SMB executives over the past year and a half and is conducted in coordination with Polaris Marketing Research and Dr. Goutam Challagalla, Associate Professor at the Georgia Institute of Technology College of Business. The Outlook is the only economic and employment survey that captures noteworthy trends – directly from the visions and priorities of the highest SMB executive offices.
Quantitative results and key findings from the Q2 2014 SMB Job Generation Outlook survey were analyzed, and through a series of graphs and charts, the statistical relationship of trends in the small to mid-sized business market has been illustrated. A detailed narrative of the data analysis follows the illustrations on page 12.
Heralded in our national discourse as the jobs engine for economic revitalization, the SMB marketplace plays a significant role in supporting the backbone of the U.S. economy and providing employment opportunities for millions of workers.
Lucas Group will continue the SMB Job Generation Outlook survey on a quarterly basis via online surveys with top executives from a variety of SMBs around the country and across industry segments.
We encourage you to retain this report as a reference. Consider how this information may impact you – now and throughout the following year. As always, please feel free to contact us. We welcome your questions and feedback.
Thank you for your interest in this important analysis of the SMB economic and employment outlook.
TITLES & COMPANY REVENUE
With a year and half of economic and market data, and more than 1,500 executives surveyed, the Lucas Group SMB Job Generation Outlook is an insightful and trusted resource for gauging the current economic opinions and employment plans of America’s small to midsized businesses. This report provides a trending outlook on the issues and topics most pertinent to today’s SMB market. From Manufacturing and Finance to Health Care and Information Technology, the Q2 2014 report includes responses from 400 SMB executives whom knowledgably represent the foundation of the U.S. economy and workforce.
Fifty-nine percent of the Q2 2014 survey respondents reported 2013 corporate revenues at or below $150M. Another 31 percent reported revenues between $151M-$600M, and 10 percent of respondents are in the largest financial segment of the SMB with $601M-$999M in 2013 revenues. The Q2 2014 report is the sixth edition of the Lucas Group SMB Job Generation Outlook survey.
JOB GROWTH PROSPECTS FOR COMPANIES & COUNTRY
Fifty-four percent of Q2 respondents reported being somewhat or very optimistic about job growth prospects for their own companies. While down 3 points from Q1, responses were slightly elevated from the executive outlook one year ago. In terms of job growth prospects, about one-third of SMBs are in the neutral position, with 33 percent reporting neither optimism nor pessimism regarding their own company’s job growth prospects for the coming months. This level of self neutrality has remained consistent the past several quarters. The percentage of SMB leaders who express feeling somewhat or very pessimistic about job growth ticked up slightly from last quarter to 13 percent in Q2.
In terms of national outlook, SMB neutrality levels remained similar. Thirty-four percent reported neither optimism nor pessimism about job growth prospects for the U.S. during the next quarter – the highest level of neutrality in the survey’s six-quarter history. Whereas the majority of SMBs were optimistic about their own company’s job growth prospects for Q2 2014 (54 percent), only 42 percent reported similar optimism about overall U.S. job prospects. Negativity regarding the nation’s job growth prospects has dropped from its survey high of 37 percent in Q3 2013, but remains at one-fourth of reporting SMBs.
ECONOMIC PROSPECTS FOR COMPANIES & COUNTRY
Nearly 70 percent of SMBs continue to be optimistic about the economic prospects for their own companies in the coming months, with 22 percent saying they are very optimistic. While the percentage of respondents who report the highest levels of optimism remains lower than responses from one year ago, the 22 percent does mark a small, though steady, three-quarter increase. SMBs who report pessimism stayed under 10 percent in Q2 2014, having dropped from an Outlook history high of 15 percent in Q3 2013 to a survey low of five percent in
Consistent with previous surveys, optimism drops among SMB leaders when considering the U.S. economy as a whole. Whereas 69 percent report optimism about their own company’s economic prospects, only 50 percent of SMB leaders report being somewhat or very optimistic about prospects for the overall U.S. economy in the coming quarter. This is down six points from the survey’s high of 57 percent one year ago.
In relation, pessimism has witnessed a slight rise. Having dropped steadily since its Q3 2013 high of 34 percent to reach a survey low of 19 percent in Q1 2014, pessimism levels related to the national economy increased slightly in Q2 to 23 percent.
The majority of small and mid-sized U.S. business leaders say their companies are in a positive, healthy condition. The percentage of SMB executives who self-report a position of “maintaining stability” or “growth” has remained consistently high, near 90 percent each of the past six quarters. Of the 88 percent of SMB leaders who report positive positioning in Q2, 40 percent say they are in the most favorable position of “growth”, down three points from last quarter.
SMBs considering themselves in a position of “controlled retrenchment” or “survival” also remained steady at 12 percent, rates held since Q2 2013. Of those, five percent report their company is in “survival” mode.
SMBs continue to view themselves and their counterparts as job generators for the U.S. economy. With 85 percent of small and midsized businesses agreeing with that assertion, one-third of respondents report strong agreement. Only two percent of respondents disagree with the statement that SMBs are job generators for the economy.
When asked specifically about their own companies, SMBs report less agreement with the statement that their own SMB is a job generator. About two-thirds (67 percent) of respondents agree with the assertion, and this lowered rate of agreement has been consistent throughout the survey’s history. Overall agreement is down 10 points in Q2 2014, from a Q1 2013 high of 75 percent. Also, while 33 percent of respondents agreed strongly that the SMB market is America’s job generator, only 18 percent report the same intensity of conviction regarding their own companies. Similarly, neutrality to the statement increases from 13 percent when asked about the entire SMB market to 24 percent for their specific company. Nine percent of SMB leaders disagree and do not see their companies as a job generator.
HIRING OR DOWNSIZING IN NEXT QUARTER
The percentage of SMBs planning to hire in the coming months remained steady from Q1 to Q2, with 45 percent of SMBs reporting plans to hire. This maintains previously recorded increases, from 38 percent in Q3 2013 to 42 percent in Q4 and 45 percent in Q1 2014. The smallest percentage of SMBs in Outlook history report plans to downsize in the coming months, with only nine percent planning ductions. This survey low falls five points below planned downsizing one year ago. Slightly fewer than half (46 percent) of SMBs do not plan any appreciable change in their workforce over the next few months.
Of those planning to hire in the next quarter, SMBs who report big hiring plans have increased significantly the past several quarters. When asked about the percentage change hiring plans represent to a responding SMB’s total workforce, 22 percent report increases of larger than 26 percent of their workforce. This is up from 6 percent in Q3 2013, 10 percent in Q4 2013, and 12 percent in Q1 2014. The largest single jump was seen in the biggest hiring grouping, with 13 percent saying their hiring plans would add more than 50 percent to their total workforce (more than double the six percent response in Q1).
In relation, those planning to downsize in the coming months are planning to do so with smaller percentile impact. The majority of companies (85 percent) reporting reduction plans project their downsizing will affect less than 25 percent, with 41 percent projecting reductions of less than 10 percent of their total workforce. Only 15 percent expect reductions of more than 25 percent, the smallest large-scale reduction impact reported since Q2 2013.
HIRING OR DOWNSIZING IN NEXT 12 MONTHS
Consistent with previous quarters, SMB executives continue to be more optimistic when considering hiring or downsizing plans for the next 12 months. This quarter, 57 percent of SMB leaders expect to hire in the coming year. Up 16 points from the same time last year, this marks an Outlook high.
Q2 also saw the lowest planned reduction in survey history, with only 11 percent of SMBs reporting plans to downsize in the next 12 months. While 47 percent of SMBs report no plans to hire or to downsize in the next quarter, that number thinned to about one-third when considering the longer 12-month period.
When asked about how these hiring or downsizing plans affect overall workforce numbers, half say their hiring plans will represent less than 10 percent. The big change from past quarters, however, is in the number of SMBs who plan to “hire big”. In Q2, 20 percent of SMBs expect to increase their total workforce by more than 26 percent in the next year. This survey high is up 12 points from last quarter alone.
One of the areas studied by the SMB Job Generation Outlook is the ease and/or difficulty SMBs face when seeking to hire qualified professional talent. Over the past year and a half, the survey has found the available talent gap widening for SMBs. In Q2 2014, only five percent of SMB leaders report they have no difficulty finding and hiring qualified candidates for open professional and management positions. This is the smallest percentage reporting ease in hiring in the Outlook’s history. In relation, the percentage of executives who report that finding talent is difficult has risen in Q2 to a survey high of 64 percent, with 14 percent reporting talent acquisition as extremely difficult. This intense level of difficulty has doubled from one year ago.
When asked which functional roles are most difficult to fill with qualified candidates, Sales leads the pack with 34 percent reporting it challenging. Information Technology, which surpassed Sales in Q1 for the first time since Q2 2013, fell back to second in Q2 with 32 percent citing it as difficult. Manufacturing Management, Accounting, and Finance range from 27 percent to 22 percent, and Marketing and Human Resources come in at 17 percent and 12 percent, respectively. SMBs continue to report finding the least difficulty in hiring Legal professionals, with only seven percent citing difficulty. Sixteen percent of SMBs responded they had trouble in “other” areas of professional and management recruitment.
TOP ISSUES FACING SMBs
Since early 2013, SMB leaders have reported health care costs to be of chief concern to their businesses. Having reached a survey high of 40 percent of SMB executives citing health care costs as their top concern in Q4, the gap between health care and talent availability has slowly narrowed. In Q2 2014, health care maintained the #1 spot with 33 percent, but talent availability concerns rose from 21 percent in Q1 to 28 percent in Q2. This increase is consistent with the findings that SMBs are reporting the highest levels of talent acquisition difficulty in Outlook history, with 64 percent reporting difficulty in hiring qualified professional talent. (See above)
Health care costs and talent availability represent the top concerns for 61 percent of the SMBs in our survey, but several other key issues remain most important to the remaining near 40 percent. Eighteen percent of SMBs report that competition from domestic and international markets is their #1 concern, and another 12 percent cite uncertainty in tax policy. Environmental regulation concerns have historically been the least ranked, with only 8 percent reporting this issue at chief concern in Q2 2104.
IMPACT OF PATIENT PROTECTION AND AFFORDABLE CARE ACT
In addition to gauging top concerns in the SMB market, the Job Generation Outlook surveys executives about their planning and expectations for a variety of changes in the business and political landscape. The survey asks SMB leaders about their companies’ preparations toward the implementation of the Patient Protection and Affordable Care Act (Obamacare) and their projections regarding the impact the law will have on their businesses.
The vast majority of respondents have consistently reported that they expect Obamacare to have at least some level of business impact (a “little”, “some” or “large” impact). After a slight dip in Q1 2014 to 87 percent expecting some level of impact, Q2 responses to this question have ticked back up to more than 90 percent. One-third of SMBs report the ACA will have a “large” impact on their company, while 58 percent report that law will have “some” or “little” impact on their operations.
In addition to impact, the survey looks at implementation preparation levels. In Q2 2014, the highest percentage of SMBs (40 percent) in survey history report that their companies have prepared and are ready for the law’s full implementation. This number is up from only 18 percent one year ago. Similarly, while 57 percent reported in Q2 2013 that they were actively working on ACA preparation yet not ready, in Q2 2014, that number has dropped to 44 percent. Only six percent now say they have not done anything but that they plan to (down from 11 percent one year ago). Consistent with several past quarters, one out of ten SMBs report that they have not and will not do anything in preparation of the law’s full implementation.
BABY BOOMER RETIREMENT
As members of the Baby Boomer generation continue to reach retirement age – enabling millions of professionals to leave the workforce over the next decade – the impact felt by these mass retirements will be significant to many businesses. The SMB Job Generation Outlook asks leaders to qualify the impact projected retirements will have on their businesses.
Over recent months, impact levels have crept upward and this quarter reached a survey high of 19 percent of SMBs expecting a “very big” impact from the retirements of Baby Boomers. More than half of all respondents expect at least “some” impact, and less than one-third (29 percent) say that Baby Boomer retirement will not impact their companies.
IMPACT OF RETIRING BABY BOOMERS
SMBs are beginning to express that Baby Boomer retirements are having, or will have, a measurable impact on their businesses – both in potentially positive and negative ways. Since Q2 2013, SMBs have reported that the creation of a knowledge gap, or “brain drain”, was the chief effect felt by or expected from retirements. This retirement consequence has far outpaced others for nearly a year. While the knowledge gap concern again remained top choice (with 59 percent predicting it will affect their business), the Outlook saw a continued uptick in the percentage of SMB leaders who also foresee other retirement effects.
In addition to knowledge concerns, SMBs reported an increase in positively perceived effects. Twenty-seven percent reported that retirements enhance their prospects for future innovation and growth (up from a survey low of 17 percent in Q3 2013), and 34 percent predict that retirements will improve their ability to consider new approaches or processes. While up from the previous three quarters, each remains several points off their survey high, both recorded one year ago. Of least concern each quarter is that retirements will impair companies’ abilities to compete in the market, with only 12 percent of Q2 respondents reporting that concern as a projected impact.
Closely related to SMB hiring plans and Baby Boomer retirement effects is the relationship these topics have with the Millennial workforce. With unemployment rates consistently higher than the average population’s, Millennial job opportunities continue to be a hot bed of discussion. To study connections, the SMB Job Generation Outlook asks business leaders what – if any – plans their companies have in place related to Millennial hiring.
According to Q2 2014 data results, the majority (66 percent) of SMBs surveyed do not have any formal plans to specifically recruit Millennial candidates over the next several months. Twenty-five percent of SMBs report that they plan to specifically target Millennials in the coming quarter for hire, and nine percent report an effort to actually hire fewer candidates from the Millennial workforce pool. The SMB Job Generation Outlook will continue to survey business leaders regarding this topic and consider the effects that Baby Boomer retirements and Millennial candidates exert upon one another.
With unemployment rates among veterans continuing to outpace the general population, workforce issues and jobs programs remain a topic of national, state, and local discourse. Despite estimates that three million veterans have returned from service over the past decade and another million are expected to return to civilian life in the next five years, the majority of surveyed SMBs report having no specific plan to recruit or hire military veterans.
Seventy-two percent of SMBs are open to hiring vets, yet take no specific actions. Only 17 percent of responding SMBs say their companies have a specific plan in place to hire veterans. Eleven percent of SMBs say they do not and will not target veterans for hire in the coming months.
As business leaders, politicians, and economic experts continue to debate policies regarding raising the minimum wage, American SMBs are regularly cited as a critical business sector that could be negatively affected by such increases. In Q1 2014, the Outlook asked SMB executives about the potential impacts a federal minimum wage increase to $10.10 per hour would have on their companies. Slightly more half (52 percent) reported that an increase to $10.10 would have no impact – neither positive nor negative – on its business. Dipping only slightly to 49 percent, that number did not statically change in the Q2 survey.
Of those SMBs citing some level of impact, the largest percentage (25 percent) reported that a wage raise would result in an increase of pricing to their end customers, similar to last quarter’s 26 percent. Allowing for multiple responses, the Q2 2014 survey also revealed that a $10.10 minimum wage would create some level of negative hiring effect for 44 percent of SMBs. Twenty-two percent would reduce current hiring plans (up three points from last quarter) and seven percent would eliminate all new hiring (no change from last quarter). Fifteen percent of respondents report that a $10.10 minimum wage increase would lead them to reduce current workforce numbers. As in Q1, three percent of SMBs surveyed in Q2 believe they would not be able to stay in business should the $10.10 per hour minimum wage become law.
As the question of minimum wage is a complicated and multi-faceted economic issue, much discussion also centers on the question, “How much is the right amount?” Survey respondents were asked to use a sliding scale to provide an opinion on where they would ideally like to see the minimum hourly wage set. Their responses appear to show an appetite – to some extent – among SMBs for increasing the minimum wage, with an ideal mean minimum wage of approximately $9.10 an hour. While 31 percent wished to keep the rate between its current $7.25 per hour and $8.20 per hour, 46 percent of respondents felt that the $8.21–$10.10 (the rate proposed by the White House) range was most ideal. Interestingly, 23 percent of SMB leaders chose answers in the rate range of $10.11–12.00 as most ideal – going beyond the proposed $10.10 increase.
CONTRACT OR PERMANENT EMPLOYEES?
American SMBs continue to demonstrate a desire to hire permanent employees into their companies. Despite worries that increasing health care costs would encourage more businesses to seek contract workers over permanent workers, SMBs have consistently favored a permanent or combination approach. Only seven percent are looking to hire contract workers only. This is the lowest level in survey history and off 6 points from the Q3 2013 high of 13 percent. Thirty-six percent of SMB leaders say their companies will hire only permanent employees in the coming months, and another 33 percent report planning to hire a combination of permanent and contract workers. Twenty-four percent of respondents don’t specifically plan to hire either next quarter, the second highest reported “neither” number in the past year.
As immigration concerns and proposals for reform to both policy and law continue to be a divisive and hotly debated topic across America, SMBs have consistently reported moderate support of at least some action toward restructuring the U.S. immigration system. Overall support for easing immigration requirements, however, appears to have cooled from one year ago.
Less than half (46 percent) of SMBs surveyed agree with the statement that the U.S. should ease immigration requirements for skilled workers in IT, science, and other high-demand fields. This number is down nine points from last quarter and only one point up from the survey low of 45 percent, cited in the Q2 2013 survey. Onequarter of SMBs maintain a neutral position regarding immigration for this skilled professional set, and 29 percent disagree with the proposal to ease requirements. This is the highest reported disagreement in the Outlook’s history.
Immigration easement support drops when considering other population sets, and in Q2 2014, runs about even between agreement and disagreement when considering skilled laborers for manufacturing. Thirty-eight percent of Q2 respondents agree with the statement that the U.S. should ease requirements for manufacturing talent, down six points from Q1 and the lowest support rate recorded in the past year and half. In relation, 35 percent disagreed with the idea of easing manufacturing talent immigration requirements in Q2, up 12 points from one year ago.
SMB support for easing immigration requirements plummets when considering either immigrants already living in the U.S. or all immigrants, now and in the future. In both instances, more SMB leaders disagree with easing requirements (48 percent and 59 percent, respectively) than agree.
The majority of American SMB leaders (67 percent) continue to report a feeling of pessimism regarding the prospects of effective bipartisanship in the federal government. According to the Job Generation Outlook, two-thirds of SMB executives consistently say that they are somewhat or very pessimistic about near-term cooperation in Washington. This number has remained steady over the past year and a half. In relation, the percentage of SMB leaders who report feeling very optimistic has reached an historic low, at only two percent. Another 11 percent report feeling somewhat optimistic about bipartisan efforts at the federal level, and one in five say they have no opinion either way.
While SMB executives have historically reported higher rates of optimism regarding state bipartisanship efforts (versus federal), that gap narrowed somewhat in Q2. Optimism about state bipartisanship reached a survey low in Q2 of 12 percent, down from its 19 percent high in Q3 2013. Similarly, state bipartisanship negativity saw a four point uptick in Q2 to 56 percent.
The intensity of pessimism in state versus federal government varies. Whereas 43 percent (of the total 67 percent) of SMBs report being very pessimistic about cooperation in Washington, the intensity of negativity lessens at the state level, with pessimism numbers evenly split, 28 percent somewhat pessimistic and 28 percent very pessimistic.
CHANGE IN WORKFORCE AND FULLY-BURDENED EXPENSES
As part of the Q2 2014 survey, SMBs reported similar ratios in changes to workforce and fully-burdened expenses as they had the past several quarters. Slightly over half (53 percent) reported that their company’s workforce related expenses increased, with 47 percent of SMB leaders reporting a slight increase and six percent reporting a dramatic increase. Thirty-six percent reported no change, and 11 percent reported decreases, with one percent citing those decreases as dramatic.
WORKFORCE (IN FTES) INCREASES OVER LAST QUARTER
Of the SMBs reporting increases to their workforce and fully burdenedexpenses last quarter, fewer saw significant increases of more than 15 percent to their total costs, with those reporting high-level increases dropping from 40 percent in Q1 to 32 percent in Q2. In relation, 42 percent of SMBs reporting expense increases in Q1 experienced an increase in expenses of less than 10 percent, and in Q2, that number rose to 53 percent. More SMBs saw increases in the 5 to 10 percent range than any other, with 34 percent.
WORKFORCE (IN FTES) DECREASES OVER LAST QUARTER
While 88 percent of SMBs reported either no change or an increase in workforce and fully-burdened expenses, 12 percent of survey respondents reported decreases to their expenses. That overall percentage has changed only slightly over the past three quarters, but the make-up of those decreases shifted in the Q2 survey. The decreases SMBs witnessed in this past quarter were more significant than in past quarters. Both Q4 2013 and Q1 2014 surveys revealed that of those whose expenses decreased, more than 60 percent did so at less than 10 percent of their total costs. In comparison, SMBs reporting a decrease in this past survey did so at an essentially even split, with 35 percent reporting decreases of 10 percent or less, 34 percent reporting an 11 to 20 percent decrease, and 31 percent saying their expenses decreased significantly (more than 21 percent).
Representing a cross-section of U.S. industries, Q2 2014 Outlook respondents reported working in more than 15 different business sectors, including Manufacturing, Financial/Insurance/Real Estate, Health Care/Medical, Business Services, and Information Technology.
Fifty-three percent of Q2 respondents were from mid-sized businesses with 100-999 employees. Twenty percent of respondents reported employing between 1,000 and 4,999 people. Seven percent represented the largest sector of the SMB with 5,000 or more employees, and 20 percent of business executives reported workforces of fewer than 100 employees.
LENGTH OF TIME IN BUSINESS
The SMB Job Generation Outlook survey included 400 executives from long-standing U.S. businesses, with 66 percent of Q2 respondents having been in business for more than 20 years. Another 29 percent have been in business from 6-20 years and only five percent have been newly founded within the past five years.
TYPE OF COMPANY
LOCATION OF COMPANY
The Q2 2014 SMB Job Generation Outlook surveyed business leaders from 38 states, with the strongest concentrations of respondents from California, New York, Texas, Florida, and Illinois.
Lucas Group SMB Job Generation Outlook Survey
Q2 2014 Closing Remarks
Over the past six quarters, Lucas Group has surveyed more than 1,500 small to mid-sized business executives via the SMB JobGeneration Outlook. Published quarterly, the Outlook seeks to uncover and report upon the business opinions and market expectations of the SMB’s highest level officers. Focused intentionally on C-level executives and business owners, the Outlook addresses an array of significant topics, including the economy’s health, employment trends, political issues, and SMB-specific growth plans.
Q2 2014 Outlook respondents represented 38 states and a variety of industries. From Manufacturing and Business Services to Health Care and Information Technology, these SMB executives knowledgably characterize the foundation of the U.S. economy and workforce. The majority of reporting companies are long-standing businesses with more than 20 years in operation, employee workforces between 100-
1,500 and 2013 corporate revenues between $50M-$600M.
Overall, the survey revealed that small to mid-sized business leaders are generally optimistic about opportunities in the U.S.economy and the SMB sector. They express positivity regarding job creation, economic growth, and the health of their own companies. For those SMBs who report plans to hire, many plan to do so in increasingly larger numbers, proportional to their workforces. As with past quarters, SMBs do not, however, reveal similar optimism about the U.S. political landscape or bipartisan efforts.
More SMBs reveal “big” hiring plans
Forty-five percent of American SMBs surveyed report plans to hire additional employees in the next few months. Up from 38 percent in Q3 2013, this number remained steady from Q1 2014. The number of SMBs who report plans to downsize their workforces in the coming quarter dropped again in Q2 to an Outlook low of nine percent.
Of those businesses looking to hire new workers, more are planning to do so in larger numbers than during the past year and half. Nearly one-quarter (24 percent) of growing SMBs report plans to increase their total current workforce by more than 26 percent doubling projections from Q1 2014. Of those, 13 percent plan to increase their full workforce by more than 50 percent. These numbers have increased steadily over the past several quarters. Similarly, the number of SMBs planning to increase their workforce by less than 10 percent has dropped 20 points, since reaching a survey high in Q3 2013 of 74 percent, to slightly more than half in Q2.
SMBs continue to demonstrate greater optimism when asked about longer-term hiring plans. Fifty-seven percent of SMBs plan to hire in the next 12 months (up from 45 percent planning to hire in the next quarter). Again, those planning to increase their total workforce numbers are looking to do so in big ways, with 20 percent planning increases of more than 26 percent of total workforce, up 8 points over last quarter alone. Relationally, those planning to downsize – both in the next quarter and over the next 12 months – are planning to do so with less overall impact, with 85 percent and 78 percent of those SMBs planning to reduce workforces by less than 10 percent respectively.
Growing Concerns over Retirements and Talent Availability
SMBs report that forthcoming Baby Boomer retirements will increasingly affect their organizations. While the overall percentage of SMBs projecting impact from retirements has remained steady, the ratio of expected influence has shifted. More than 70 percent of Q2 respondents expect to experience some level of impact from Baby Boomer retirement, with 19 percent now projecting a “very big” impact. This greater projected impact represents an eight point jump from one year ago and an SMB Job Generation Outlook high.
Additionally, SMBs are reporting increasing difficulty in finding and hiring qualified talent for key professional functionalities. The Q2 2014 survey revealed a widening gap between businesses who hire easily and those who struggle to identify and recruit ideal talent. Only five percent of SMB leaders report that talent acquisition is currently “easy” for their company, off from nine percent reporting ease six months ago. Sixty-four percent (an Outlook high) report some level of difficulty in hiring, with 14 percent (also a survey high) saying that qualified professional talent acquisition has become “extremely difficult” for their company.
While Baby Boomer retirements and talent availability are increasingly impacting small to mid-sized businesses and more SMBs are planning to hire in large numbers, most Q2 2014 survey respondents report no specific plans to recruit or hire from Millennial or veteran candidate pools. This lack of specialized recruitment planning may reveal greater potential difficulty in the coming months for SMB growth and workforce management. The SMB Job Generation Outlook will continue to monitor the business impacts of retirement, talent availability, and candidatefocused recruitment plans that may affect the sector’s ability to find, hire, and retain qualified professional talent. Noting these challenges, the survey will also continue to gauge how SMB leaders plan for and manage the changing economic, political, and workforce landscape.