While large companies continue to announce sweeping layoffs, it looks like small businesses are on a course for growth. Can they
According to ADP, small businesses under 50 employees added 95,000 jobs this fall, while large employers with 500 or more employees cut 83,000 jobs. The opposing trends point to
ADP found that only 18% of small businesses plan on changing wages in the next three months, compared to 50% of mid-sized businesses (companies with 50 to 999 employees) and 58% of large businesses (companies with 1,000 or more employees). In other words, small businesses need to rely on other tactics to entice and retain their workers, Wang says.
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"From a retention perspective, the most cited reason for small businesses' challenges is the demand for higher salaries," says Wang. "But if increasing wages is not an option, then employers need to have honest conversations with their employees. Transparency and communication are key."
Wang emphasizes that while small employers may not be able to afford the best wages or benefits, they have the ability to connect with all their employees, which isn't as easily done at companies with 1,000 plus workers. She advises small employers to include their employees on the company's strategies for growth and production, and have open conversations about current wage limitations.
For the most part, small employers know their focus has to remain on connection and culture. According to ADP, when small businesses were asked what their workforce priorities are for the next three to six months, 27% said improving the employee experience, 25% said upskilling current employees and 24% said expanding employee benefits. Wang notes that benefits around flexibility and mental health will especially be crucial as small employers try to establish a healthy, balanced work culture. But small employers will have to do more than that, underlines Wang.
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"Employees want to feel connected to their employer," she says. "There's little things employers can do like having meals together as a team, participating in community outreach together, finding shared charitable causes — all this builds a connection point for the employee."
Small businesses can also use their size to their advantage when it comes to upskilling. Since small employers often need talent that can excel in multiple roles, they tend to learn a variety of skills on the job. Without overworking any one employee, small employers should stress to their workforce that they can wear different hats on the job, says Wang.
"I have a friend who started working during high school and into college at a local pizza shop," recalls Wang. "She went to college, tried other things, but eventually quit her other job to come back to the pizza shop. The owner ended up asking her to manage another shop in a different state."
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Wang reminds small employers that wages aren't everything. As larger employers continue to layoff workers and bring people back into the office, there's a chance for small businesses to establish themselves as people-first employers. And just like with any business, if small employers invest in their talent's skills and well-being, everyone wins, emphasizes Wang.
"Consider how you can provide work-life balance for the employees and things like that," says Wang. "Employees want to be happy in the work they're doing, and in the end, it actually results in better productivity for small business owners."
