While some of the smallest of small businesses want to stay at their current size, plenty of others want to grow, and they are prepared to invest in their workforces in order to do so.
Small business owners with five or more employees are more than twice as likely as those with four or fewer to say they expect their full-time staff to grow in the next 12 months, but they’re also more likely to say they have difficulty finding new workers. A clear majority of small business owners with five or more employees report hiring concerns: 58% of those with five to nine employees, 61% of those with 10 to 49 employees, and 63% of those with 50 or more employees say it’s gotten harder to find qualified new hires in the past year.
To attract more workers — and, importantly, qualified ones — these small business owners know they’ll have to spend more cash. Overall, 24% of small business owners say they expect the cost of labor to outpace the cost of capital or the cost of raw materials in the next 12 months. That percentage jumps to 34% among businesses with 10 to 49 employees and to 44% among businesses with 50 or more workers.
In previous quarters, our CNBC/SurveyMonkey Small Business Survey has found that small businesses are going to great lengths to recruit new workers, offering higher wages, additional training, and even non-monetary incentives like flexible work arrangements and mentorship opportunities.
Those extreme measures often come with a real cost — one that is more easily borne by larger small businesses who are more likely to have more resources to start. A majority of all small business owners expect revenue to increase in the next year, but that percentage increases with firm size, from 57% among small businesses with zero to four employees to 70% among those with 50 or more.
With the costs of capital and raw materials ranking lower for them, small business owners who already have more employees have the advantage of dedicating more of their extra revenue to invest in their workers.
— By Laura Wronski, senior research scientist, SurveyMonkey, and Jon Cohen, chief research officer, SurveyMonkey