“Main Street is doing better as state and local restrictions are eased, but finding qualified labor is a critical issue for small businesses nationwide Small business owners are competing with the pandemic and increased unemployment benefits that are keeping some workers out of the labor force. However, owners remain determined to hire workers and grow their business.”‘

NFIB Chief Economist Bill Dunkelberg

30% | Percentage of employers offering higher wages.

Dunkelberg said businesses have to compete with the amount of money people are receiving in unemployment benefits. “And, of course, they’re competing with each other for the people who are qualified.”

Other key survey findings include:

• Seven of 10 NFIB survey components improved and three declined.
• Sales expectations over the next three months improved eight points to a net 0% of owners, a historically low level.
• Earnings trends over the past three months declined four points to a net negative 15%.
  
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When it comes to employee wellness in the age of coronavirus, employees are placing more emphasis on childcare, mental health, and maintaining a strong connection to employees, according to the “Well-Being Index,” a quarterly survey from the Principal Financial Group. The survey of 500 business leaders who provide employee benefits was released this morning. (October 6, 2020)

“COVID-19 has fundamentally reshaped the benefits landscape,” says Kara Hoogensen, senior vice president of U.S. Insurance Solutions for Principal. “Employees and employers alike are recognizing the need for coverage that protects the health and well-being of both individuals and their families. This has brought new meaning to benefits that may have previously fallen lower on an employee’s priority list, such as income protection, life insurance, and mental health programs.”

40% | Percentage of companies surveyed that allow employees to use their sick leave and/or vacation days for childcare needs.

38% | Percentage of companies that allow employees flexible work hours without reducing pay for working parents.

47% | Percentage of employers who say employees seem stressed or overwhelmed due to increased or more demanding workloads.

48% | Percentage or employers who say they’ve seen an increase in the utilization of mental health employee benefits or have had more questions about available mental health resources.

37% | Percentage of businesses that are allowing more employees to work remotely during COVID.

While cash flow is steady, businesses are continuing to react to the economic impacts of COVID-19 by looking for ways to cut budget, reducing investments in the business, and in some instances, using their personal finances to support the company.

“The road ahead will continue to be bumpy for many small businesses,” said Amy Friedrich, president of U.S. Insurance Solutions for Principal. “However, given the remarkable resilience of the small business community, I believe more companies will return to grow within the next 6-12 months. The findings of this quarter’s study highlight the optimism small and medium-sized businesses feel about what’s to come.”

Employee safety remains a chief concern for businesses

Businesses are eager to open back up. About half are fully operational when compared to before COVID-19.

Safety is the #1 reason why many have postponed reopening or have gone with a partial reopening.

45% | Percentage of surveyed business leaders who say they will go fully operational when it is safe for their employees

38% | Percentage of surveyed business leaders who say they will go fully operational when it is safe for their customers

Early on, businesses were worried productivity and employee communication would suffer once they moved to a remote working environment. However, many are now giving remote work glowing reviews.

37% | Percentage of company leaders surveyed who increased remote access.

The work environment in the COVID-19 era hasn’t been easy on working families.

57% | Percentage of surveyed employers who report their employees seem stressed due to additional family or caregiving responsibilities

44% | Percentage of surveyed employers who say employee morale is declining due to the isolation many workers feel in their home office environment.

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The competitive small business job market continues to drive wage growth higher, according to the latest Paychex, IHS Markit Small Business Employment Watch.

Steady growth in hourly earnings and hours worked – with hours worked in December posting the strongest gains since 2012 – pushed weekly earnings growth to 4.13 percent, a new all-time high for employees of small businesses, according to the tracking survey.

“Small business job gains have flattened in the second half of the year as labor markets prove very tight,” said James Diffley, chief regional economist at IHS Markit. “In response, weekly earnings have accelerated, surging from 2.49 percent mid-year to 4.13 percent at year-end.”

“The new high in weekly earnings growth this month is certainly positive news for the employees of small businesses,” said Martin Mucci, Paychex president and CEO. “Not only are businesses raising wages, but they’re also increasing hours for their current employees, a sure sign that employers are responding to the pressures of the tight labor market.”

Additional findings from the December Small Business Employment Watch (2019)

The South | Leading region for small business employment growth

The West | Leading region for hourly earnings growth followed closely by the Northeast.

Tennessee | The leader among states in small business job growth

New York | The leader in hourly earnings growth at the state level

Dallas | The leader among metropolitan areas for small business job growth

Los Angeles | The leader among metropolitan areas for hourly earnings job growth

Leisure and Hospitality |Leading industry sectors in combined wage-growth components: hourly earnings, weekly earnings and weekly hours.

Source and more information: The Paychex-IHS Markit Small Business Employment Watch

Click on an occupation below to see the full occupational profile on the Bureau of Labor Statistics’ Occupational Outlook Handbook.

Source | Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Last Modified Date: Friday, April 12, 2019

Occupational Projections by Category

The Occupational Outlook Handbook also has career information on duties, education and training, pay, and outlook for hundreds of occupations. Below, the occupations are grouped by work categories. The links will take you to the Bureau of Labor Statistics website.

• Architecture and Engineering
• Arts and Design
• Building and Grounds Cleaning
• Business and Financial
• Community and Social Service
• Computer and Information Technology
• Construction and Extraction
• Education, Training, and Library
• Entertainment and Sports
• Farming, Fishing, and Forestry
• Food Preparation and Serving
• Healthcare
• Installation, Maintenance, and Repair
• Legal
• Life, Physical, and Social Science
• Management
• Math
• Media and Communication
• Military
• Office and Administrative Support
• Personal Care and Service
• Production
• Protective Service
• Sales
• Transportation and Material Moving

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76% | Percentage of private industry workers who receive paid vacation days.

Consider these statistics from the BLS for private industry workers when determining your company’s vacation policy. As you’ll see, the length of time an employee has been on a company’s payroll is the factor that determines most an employees paid vacation.

1-5 years with the company

After one year of service at a company:

• 0-5 paid vacation days (7%)
• 5-9 paid vacation days (38%)
• 10-14 paid vacation days (35%)
• 15-19 paid vacation days (12%)
• 20-24 paid vacation days (7%)
• 24+ paid vacation days (2%)

As you can see, the majority of workers were offered between five and 14 paid vacation days. The average paid vacation time for small business after one year of service is 10 days.

5-10 years with the company

After five years of service at a company:

• 0-5 paid vacation days (2%)
• 5-9 paid vacation days (9%)
• 10-14 paid vacation days (36%)
• 15-19 paid vacation days (34%)
• 20-24 paid vacation days (12%)
• 24+ paid vacation days (6%)

Typically, the more years an employee has worked at a company, the more vacation days they are allowed. The majority of paid vacation days is 10-19 paid vacation days. The average vacation time in the U.S. after five years of service is 14 days.

10-20 years with a company

After 10 years of service at a company:

• 0-5 paid vacation days (2%)
• 5-9 paid vacation days (7%)
• 10-14 paid vacation days (16%)
• 15-19 paid vacation days (41%)
• 20-24 paid vacation days (22%)
• 24+ paid vacation days (13%)

Almost half of employees (41%) have access to 15-19 paid vacation days. The average vacation time for small business employees after 10 years of service is 17 days.

20+ years with a company

After 20 years of service at a company:

• 0-5 paid vacation days (2%)
• 5-9 paid vacation days (6%)
• 10-14 paid vacation days (13%)
• 15-19 paid vacation days (20%)
• 20-24 paid vacation days (35%)
• 24+ paid vacation days (25%)

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Some employees prefer benefits other than more time off

According to Business News Daily, while every employee loves a salary increase, there are other ways to reward workers besides offering more money or time. Here are 15 perks offered by large and small businesses across the country. (To learn about these perks, see Business News Daily.)

1. A pet-friendly environment
2. Massages and yoga
3. Free books
4. Free food
5. No official work hours
6. Birthdays off
7. Family focus
8. Onsite health services
9. Mental health support
10. Continuing education
11. Student loan paydowns
12. Midday fitness and recreation
13. Donation matching
14. Office parties
15. Freedom (and funding) to travel

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Highly-skilled, independent professionals (freelancers, independent consultants, etc.) who provide services to businesses on a regular basis are, as a group, growing rapidly, according to the third annual Client of Choice studies, recently released by MBO Partners. We asked Steve King, a partner at Emergent Research, and a regular contributor to SmallBusiness.com, to provide us with an overview of this rapid growth. (Note: Steve contributed to the report.

As displayed on this graph, the size of this segment of the U.S. workforce has grown from 4.5 million in 2011 to 7.4 million in 2018.

The growth is seen in diverse segments of the U.S. economy

This rapid growth means it is one of the fastest growing segments of the gig (or sharing) economy. Both supply and demand factors are driving this growth. Here are some of those factors.

• The battle for talent, shortages of such skilled professionals and the increased need for talent agility and flexibility, are resulting in greater use of external talent.
• According to the report, supplier SAP Fieldglass and the supply management analyst firm Ardent Partners both found that over 40 percent of the average corporation’s overall workforce is currently comprised of nonemployee labor. (Ten years ago, it was 16 percent.)
• It’s not just a big industry phenomenon. Small businesses, governments at all levels and non-profit firms are also hiring more independent professionals. 

More highly-skilled workers are opting to be independent professionals

• Many skilled workers are attracted to the work and life autonomy, flexibility, and control in being an independent worker.
• This trend towards the growth of independent professionals is so powerful that Deloitte, who refers to these workers “off-balance sheet employees.” calls the growth in their use one of the two most powerful trends currently impacting the future of work—along with artificial intelligence.

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While many U.S. industries are in need of employees, one of the most desperate needs are for truck drivers — both independent and company employed drivers. According to the American Trucking Association the shortage-problem is most acute in the long-haul trucking sector, where nearly 600,000 drivers are currently employed and 60,000 more drivers are needed.

Young workers, meanwhile, are hesitant to take on the long hours, weeks away from home, solitude and other hardships of long-haul trucking. That’s even though the training period is short, and pay can range from $50,000 to $100,000, or more.

In a recent Marketplace story, Portland-based driver Petru Strugari, 61, said trucking has provided a steady living for his family but it hasn’t been easy. Strugari learned truck-driving in the Romanian army, and took up commercial driving after immigrating to the U.S. in the early 1980s and being laid off from a machine shop.

“You make money because you work a lot of hours, but it’s not paid enough,” said Strugari. “The food is expensive, you sleep in the truck, you’re gone for two weeks. If you have a family, it’s tough. My wife was complaining all the time. ‘Don’t you want to come home?’ I told her they don’t bring me home. They want the truck running all the time.”

Lately, trucking companies have been hiking wages to boost hiring and retention.

According to Glassdoor, truckers’ median base-pay increased 5.1 percent in the past year to $55,435. Trucker wages start higher and are rising faster, than many other blue-collar occupations.

“Trucking began to experience a shortage of drivers in the mid-1980s,” according to economist Michael Belzer at Wayne State University. “What you have is a shortage of compensation and intensification of working conditions. And the job is not attractive enough to draw people into the industry to stay.”

Pay isn’t the only obstacle to attracting drivers. Some potential drivers think self-driving trucks could radically change long-haul trucking. Several major truck manufacturers are working on self-driving or “autonomous” trucks.

While such trucks are not yet predicted to do away with the driver shortage soon, they could change industry logistics over “the long haul.” And most experts predict specialized usage of autonomous trucks, not a complete replacement of today’s 18-wheeler.

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AP’s Joyce M. Rosenberg recently shared five things a small business owner can do to reduce their chances of employee theft. (The complete article can be found here.) Here are some quick tips.

1 | Make sure that responsibility for finances doesn’t rest with only one person. Business owners should have their bank statements sent to their home instead of to the business and given to their accountants to review.

2 | When a staffer quits or is fired, their access to the company’s computer system and email should be cut off immediately. Change passwords on any account the employee may have used.

3 | Watch out for suspicious behavior that could be a tipoff about stealing.

4 | Surveillance cameras can discourage staffers from stealing property. Even if a camera is not a deterrent, the owner can see who the thief was.

5 | If you suspect theft is taking place, consult with an attorney or HR provider to decide the best action to take.

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Are you about to hire your first employee? While we have provided tips on becoming an employer before, here are some more tips provided by the Small Business Administration (SBA).

Before finding the right person for the new job you have, you’ll need to create a plan for paying employees. Follow these steps to set up payroll:

1. Get an Employer Identification Number (EIN)
2. Find out whether you need state or local tax IDs
3. Decide if you want an independent contractor or an employee
4. Ensure new employees return a completed W-4 form
5. Schedule pay periods to coordinate tax withholding for IRS
6. Create a compensation plan for holiday, vacation and leave
7. Choose an in-house or external service for administering payroll
8. Decide who will manage your payroll system
9. Know which records must stay on file and for how long
10. Report payroll taxes as needed on quarterly and annual basis

The IRS maintains the Employer’s Tax Guide, which provides guidance on all federal tax filing requirements that could apply to the obligations for your small business. Check with your state tax agency for employer filing stipulations.

Know the difference in an employee and an independent contractor.

Distinguishing between employees and independent contractors can impact your bottom line, as this affects how you withhold taxes and avoid costly legal consequences. Learn the differences before hiring your first employee.

An independent contractor operates under a separate business name from your company and invoices for work completed. Independent contractors can sometimes qualify as employees in a legal sense. The Equal Employment Opportunity Commission created a guide for making the determination.

If your contractor is discovered to meet the legal definition of employee, you may need to pay back taxes and penalties, provide benefits, and reimburse for wages stipulated under the Fair Labor Standards Act.

Are you planning to offer employee benefits?

Healthcare and other benefits play a significant role in hiring and retaining employees. Some employee benefits are required by law, but others are optional.

Required employee benefits

• Social Security taxes: Employers must pay Social Security taxes at the same rate as their employees
• Workers’ Compensation: Required through a commercial carrier, self-insured basis, or state Workers’ Compensation Program
• Disability Insurance: Disability pay is required in California, Hawaii, New Jersey, New York, Rhode Island and Puerto Rico
• Leave benefits: Most leave benefits are optional outside those stipulated in the Family and Medical Leave Act (FMLA)
• Unemployment insurance: Varies by state, and you may need to register with your state workforce agency

Optional employee benefits

Your small business can offer a complete range of optional benefits to help attract and retain employees. Even if a benefit you offer is optional, it might still have to comply with certain laws if you choose to offer it.

Businesses that offer group health plans must comply with federal laws, for which the Department of Labor hosts a guide.

Employees can expand coverage through the Affordable Care Act and some may qualify for benefits via the Consolidated Omnibus Budget Reconciliation Act (COBRA). Businesses must extend the option of COBRA benefits to employees who are terminated or laid off.

Retirement plans are a very popular employee benefit. Consider offering an employer-sponsored plan like a 401k or a pension plan. The federal government offers a wide range of resources to aid small business owners in choosing their retirement plan and pension.

Employee incentive programs

Employee incentive programs can boost morale and create more draw for open positions: Common incentives such as stock options, flex time, wellness programs, corporate memberships and company events.

Consider benefits administration software if your budget allows. It can make your accounting easier and more efficient. Detailing these benefits in the employee handbook helps your staff make decisions, and they can use it as a reference for workplace requirements.

Follow federal and state labor laws

Protect workers’ rights and your business by adhering to labor laws, which means you must ensure that business practices align with industry regulations

Consult the Department of Labor’s federal and state law resources.

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It sounds like a cliché, but every business is only as strong as the people in the office, behind the counter or on the sales or shop floor. That’s true for big businesses and small, alike, according to David Bloom, general manager of the Small Business Group at Sterling, an employment background screening company. The impact is even greater in a small company where relatively few people are responsible for so much. We asked Bloom why background screening searches are so important. This is what he explained.

Many small businesses already require pre-employment tests, resumes or examples of skills and experience that display the potential employee is proficient in a skill. These small business owners invest in people to make sure they’re putting the right skills in the right positions.

More and more, small business owners are also using background and screeing checks to determine the risks involved with a new hire, and give you data to confirm that your hiring decisions are good ones.

Screening varies widely by industry

In Healthcare, there are stringent regulations around screening and monitoring. Other industries have no guidance at all. Screening may sound complex, but a professional background screening provider will provide guidance on regulations and best practices in your industry.

The screener you choose should be

• Familiar with your industry
• Familiar with the position or role for which you’re hiring
• Familiar with your risk tolerance

What is the cost of a bad hire?

According to the Society for Human Resource Management (SHRM), each hire costs more than $4,120 and takes 42 days. Zappos CEO Tony Hsieh says that bad hires have cost his company “well over $100 million.”

A bad hire affects more than one position

Think about the team around a new hire. Think abou the decisions made (or not made) due to poor judgment, the impact to the customer, and most costly, the value of your brand.

Each member of a team has an impact that cascades throughout the business and the culture. Nothing is harder to build than trust. Most businesses don’t have room to risk that.

What are the factors to consider when it comes to choosing a screening provider?

Compliance

Above all else, a trusted screening provider is compliant with the law. The right provider will ensure compliance with the Fair Credit Reporting Act (FCRA) and be accredited by the National Association of Professional Background Screeners (NAPBS).

Background screening is highly regulated; laws vary from state to state and even city to city, and are constantly evolving — if your background check isn’t FCRA-compliant, you put your business at serious legal risk.

Thoroughness

“Background check” can refer to a quick search of a national online database, with substantial gaps in reporting and no double-checking of source data to confirm the initial pass is correct, or it can refer to a rigorous search that involves many steps and stringent processes.

Look for a thorough, multi-step search that includes access to primary sources for criminal records, Department of Justice Sex Offender search, and verification.

Customization

Background checks should not be one-size-fits-all. Different industries and different roles require different searches. When choosing a screening service, make sure you can tailor your search to the position, whether you need to look at driver’s records, verify education and employment, conduct drug testing, or do other types of screening.

Beware of “instant” online searches. They do not provide trustworthy or compliant information. Not all background checks are created equal. When you’re considering a provider that seems legitimate, ask questions and understand what you will (and won’t) get in your search.

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