According to the National Federation of Independent Business (NFIB), half of US small business owners said they had job openings they couldn't fill in June. But look at it this way: It's better than May 2022, when it was more than halfway done. By the way, this was a record of 48 years.
Sure, inflation is eating us at lunch and we may be headed for a recession, but workers are still failing to break into the job market. Instead, we still suffer from the hangover of the Great Resignation.
Some companies are bowing to the headwinds of inflation, a near-strangled supply chain and low consumer confidence. Companies like Netflix and PayPal have initiated layoffs, while Microsoft is slowing hiring "to better align its resources," and Meta (Facebook) and Twitter have frozen hiring in some departments. Friends in the know tell me that other Fortune 500 companies are preparing to lay off staff or freeze hiring.
But for small businesses, it's a different story.
In fact, if the big guys are laying off, many small companies would be happy to hire them. As NFIB Chief Economist Bill Dunkelberg put it, "Labor shortages remain a difficult problem for small businesses."
You can repeat it.
In Asheville, North Carolina, where tourism drives the city's service-based economy, I don't know of a single company with as many employees as I'd like. The problem here is that Asheville is also an expensive city to live in.
Service jobs and the high cost of living make a bad work couple.
The answer has been to raise wages. But we are not alone.
According to the NFIB, 48% of homeowners said they had increased their compensation. That's down one point from May, but just two points below the January record of 48. Additionally, 28% of small business owners plan to increase their compensation in the next three months, up three points from May.
It is absolutely necessary.
Your workers need all the money they can get. The average rent across the country peaked at more than €2,000 for the first time.
Remember that the general budget rule is that rent should not exceed 30% of your monthly income before taxes. In other words, your employees need to earn close to €80,000 a year just to pay their rent.
It's amazing. But the numbers don't lie.
It also makes me realize that one of the main reasons potential employees don't come rushing to your door is that you don't offer enough money. Combine that with the fact that, as counted by the Federal Reserve Bank of St. Louis, the total number of hours worked, which includes both the number of workers and the length of the work week, has increased by 4,6 % year after year. So we know that even if some workers have returned, it's still not enough.
That tells me that those who showed up are working hard.
Hard work and little money: that's not a good combination for people to apply for a job.
Of course, there are other factors.
According to the Boston Consulting Group, a global survey of non-white-collar workers found that up to 37% plan to quit smoking in the next six months.
It's just what you don't want to hear.
So if you thought the Great Quit was just about office or tech workers, think again.
While office workers and others who can work from home cited concerns about flexibility (28%), work-life balance (22%), and simply feeling unhappy (15%) as the top reasons for For those who would consider quitting, money (30%) ranked higher.
About 41% also want opportunities for advancement, which to me is code for "more money."
In a global survey conducted by PwC in March, one in five respondents said they were "extremely or very likely" to change employers in the coming year.
And what are these people looking for? To surprise! At the head of 71% of the lists of workers is money.
To make money, you have to spend money. And in 2022, to have enough qualified employees, you need to raise their salaries. It's so simple.
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