The quarterly American Express Small Business Monitor reveals that almost three-quarters (74%) believe it is getting harder to find good employees and 64 per cent of SBOs believe the demands of today's job applicants exceed their qualifications. The majority (84%) of small business owners do believe they keep their best and brightest employees, but fewer (64%) say they consistently hire the best and brightest in their industry. In fact, only 11 per cent of respondents strongly agreed that they were able to do so.
The results couldn't be timelier. With much of the Baby Boomer generation set to retire, nearly half (46%) of Canada's small business owners anticipate a shortage of qualified job applicants in the coming years. A further 32 per cent are concerned about the impact this will have on their operations and 23 per cent expect to replace a significant proportion of their employees during this time frame.
In fact, nearly two-fifths (39%) of survey respondents believe it will be difficult to replace retiring employees. Despite this, seven in 10 (69%) haven't put a plan in place to deal with the impending issue, such as modifying employment practises or offering incentives to employees to stay on after retirement age.
"Strong talent is the cornerstone of good business, especially small business, where the right people can mean the difference between a loyal customer and high turnover," said Abhijeet Rege, Director of Small Business Services, American Express Canada. "But the survey also suggests that businesses should start looking to the future by thinking about the void that will be left as skilled workers start to exit these higher-level positions."
SBOs realize money isn't everything
While money is always a motivator in attracting and retaining employees, small business owners also understand that agile, flexible environments can better draw this generation's bright minds.
In fact, when asked about what incentives were most effective for small businesses looking to attract/retain staff, flexible hours were on equal footing as higher pay - with 72 per cent of respondents ranking each as effective. Other top effective attraction/retention perks include: having a dynamic business culture (62%), offering share/stock options (61%), and better health benefits (54%).
"We've seen changes in the way people are approaching their careers today, as people become more lifestyle-oriented they are seeking improved work-life rhythm," said Rege. "The biggest draw of working for a small business is job independence and flexibility. And while money remains important, business owners realize it isn't the only factor to attracting and retaining top talent."
SBOs significantly more confident about current and future financial positions
While small business benefits might be effective in drawing and keeping new hires, the owners themselves may still be reaping the greatest level of satisfaction. The Monitor found that SBOs have experienced a steady financial position over the last year and are optimistic for the future.
While they remain risk adverse, 49 per cent of SBOs report their businesses' current financial position is improving - a two- point increase over last quarter and a substantial 22-per-cent jump over 2010. In fact, the majority of small business owners (83%) feel the rewards of running your own business outweigh the risks, with 45 per cent of them "strongly agreeing" with this statement - up 13 percentage points from last year.
"What was really exciting for us to see quarter over quarter is that the majority of business owners still believe - in turbulent economic times - that the rewards and opportunities of running their own business still outweigh the risks and challenges," said Rege. "The stability owners experience has increased significantly in the past year and now, more than ever, business owners are looking to invest in the future of their operations."