The future of local work: Small businesses win by putting people first

Community over corporation: Small businesses compete for top talent by putting people first

For small employers, the current economy presents many challenges — but also many opportunities — suggests new Homebase research, which shows that employees at small companies feel more valued than those at larger companies. Read the full report below or download it as a PDF.

We have survived numerous supply chain disruptions and shortages over the past few years. Still, there’s probably at least one resource whose short supply keeps business owners up at night: labor. In fact, small business owners told Homebase in June 2022 that hiring new employees and motivating/engaging existing employees are their top business concerns, only because of high rent or real estate costs. And as recently as August 2022, less than a third of workers told Homebase they were worried about becoming unemployed at some point in the next two years. When it comes to the job market, this suggests that workers continue to see themselves in the driver’s seat.

This is a continuation of a trend that began in 2021, when more than 47 million Americans voluntarily quit their jobs, US Department of Labor. Since then, US employers have continued to have more job openings than workers to fill them. As recently as July 2022, for example, there were 11.2 million job advertisement in the United States and only 6.3 million New hires.

But there’s good news on the horizon, new research from Homebase suggests: Despite persistent labor shortages across the U.S. economy, there are signs that conditions are improving — and small businesses may enjoy a unique advantage when they do.

Small is strong: Small employers have unique connections with employees

Employees judge job satisfaction based not only on what their job pays them, but how their job makes them feel. We surveyed 3,300 hourly and gig workers in June 2022 and found that these are the small businesses that excel at making employees feel good. Compared to workers in companies with more than 500 employees, workers in companies with fewer than 10 employees:

The workplace itself can be: A majority (53%) of employees at small companies strongly agree that they can be themselves at work compared to only 36% of employees at large companies.

Feel valued and supported at work: A staggering 81% of employees at small businesses say they feel valued and supported at work, compared to 71% of employees at large companies.

Feel connected to their employer: 35% of small business employees feel highly connected to their employer, compared to only 21% of employees at large companies.

Therein lies the opportunity for small businesses: The best way to find and keep hourly workers is to lean on the things they already do well — assets like leadership, education, respect and culture. In other words, stressing people as much as paychecks.

And our research bears this out: our June survey shows that in the past 12 months, 59% of workers are in small businesses never Compared to 46% of workers at large companies considering resigning or leaving their jobs. Or put another way, more than half of workers at large companies have considered quitting, compared to less than half of workers at small companies.

What hourly workers want: Wages — but not just wages

Not surprisingly, our survey found that compensation is king: When asked what their employer could offer to make them more engaged, nearly half (49%) of current employees chose “10% more pay.” Similarly, potential employees consider salary as number 1 when they are evaluating a potential job opportunity.

However, it also means that for more than half of hourly workers, the No. 1 thing they want from their employer isn’t money. Let that sink in.

Money isn’t everything, agrees its general manager Brian Willis Persnickety print Orem, Utah. Not long ago, he surveyed his employees to determine which they value most. “Most of them value the culture and the workplace environment … more than the financial value, which was surprising to us,” says Willis, who describes his company’s culture as one where employees feel empowered and respected. “Our employees feel safe enough that they can bring concerns to us and know we’ll help them fix it … and we encourage them to give us advice. If they come up with a new process or a new idea, we’re happy to see it.”

So even if you can’t pay small business moreThey can compete by paying differently. Wages may be the top driver of employee engagement, but employees say they can feel more engaged if their employer offers them (in order of importance):

  • 10% higher salary or wages (49%)
  • More opportunities to learn new skills (12%)
  • A four-day work week (8%)
  • Paid Time Off (7%)
  • bAfter health insurance (4%)
  • 10% more bonus (4%)
  • More respect from management (4%)
  • Improved company culture (3%)
  • Remote work options (3%)
  • Greater commitment to diversity (2%)
  • Child Care Assistance (2%)
  • Hybrid work options (1%)
  • More autonomy (1%)

“We try to think ahead to what’s going to be important to high school students or college students or stay-at-home moms. And when we interview them, we focus on the things that matter to them in our experience. And honestly, a lot of them aren’t money-related. It is realized. It’s having flexibility. Things like that,” said Rob Brucato, owner The fragrance is yours, Geneva, Ill. is a custom candle shop, where employees enjoy flexible schedules, quarterly team-building events and meals for the team when they’re busy and understaffed. “We are always aware of other benefits that are non-financial.”

As we see with current employees, potential employees also value culture in addition to compensation. Here are the top 10 things potential employees tell us most attract them to a new job:

  1. Salary
  2. Respect from management
  3. leadership
  4. Predictable schedule
  5. Freedom to be yourself
  6. Company culture
  7. Education and Development
  8. Autonomy
  9. Commitment to diversity and inclusion
  10. Health insurance

All of this resonates with small business owner Andy Sommer, its founder and CEO Forth and Nomads, a Houston-based lifestyle marketplace for apparel, home goods and wellness products While he recently raised base pay for hourly employees to compete with nearby businesses, he also built a brand that job applicants wanted to associate with.

“We’re all about the feel-good lifestyle. We think everything you own will inspire you and make you feel good,” explains Sommer, who says employees gravitate to his company’s values ​​of sustainability, self-expression and creative expression. “People have a connection to our brand and want to work for us because of that.”

Mentoring Topics: Entrepreneurial Applications

Our survey found that Employees of small businesses are more likely to aspire to become entrepreneurs than those at large companies (39% vs. 26%). And this is especially true of young workers.

When you own a small business, entrepreneurship is in your blood. Leveraging your knowledge and sharing it with employees through mentorship, education and development, or other means can give you a unique advantage among employees who want to follow in your footsteps.

“Our store manager teaches yoga classes on the side, and we encourage that. In fact, we let him use our space to teach yoga classes,” says Sommer, whose store also has a coffee bar inside, whose manager recently conceived a coffee tasting experience for local Airbnb guests with Sommer’s blessing. “We want to give autonomy to our people. If they have an idea, we tell them to run with it and make it happen.”

Downside: Small economies create large workforces

Employers of all sizes and in all sectors have struggled to fill open positions. But it’s not just finding staff that’s challenging. Also, discussions are going on with them. In November 2021 Survey Among more than 500 small business employers and 2,300 employees, Homebase found that both groups realized an advantage for potential employees in the hiring process, giving them the ability to negotiate higher salaries, more flexible schedules and better benefits.

Adding insult to injury is the broader US economy. GDPFor example, continues downward trend. Meanwhile, growth consumer sentiment And wages Slow is and then there is Inflationwhich reached a 40-year high in June and. Stubborn. In August, workers told Homebase that inflation is affecting how much they pay for gas, food, rent and electricity. As all these big corporations – fedex, the gap, Tesla, compass, Netflix, Microsoft And the target, just to name a few — either announce layoffs or reduced earnings. It’s no surprise that nearly 80% of small business owners and employees told Homebase they’re worried about the recession (from our survey of 500 small businesses and up to 700 workers in July 2022).

Whether the recession actually materializes remains to be seen. From a hiring perspective, however, a contracting economy can actually benefit small businesses.

Our research is already bearing this out. In September 2022, small businesses are posting fewer jobs on Homebase than in previous months, and the jobs they is The posting is attracting more applicants. And our surveys show a sharp decline in employee turnover intentions compared to last year:

  • The number of workers who believe they will have better job options 12 months from now fell 11 percentage points, from 44% in November 2021 to 33% in June 2022.
  • The number of workers who believed they had worse job options doubled over the same period, from 6% in November 2021 to 12% in June 2022.
  • They say the number of hourly workers no Those planning to find a new job in the next 12 to 24 months rose from 39% in November 2021 to 50% in August 2022.
* Survey sample size for hourly employees: 2,300 respondents in November 2021, 1750 respondents in June 2022, and 1,000 respondents in August 2022.

“At the beginning of this year, we just had a hard time getting applicants,” said Andy Sommer, owner of Forth & Nomad. “Now it seems to be getting a little easier.”

Bottom line

Businesses of all sizes are struggling with recruiting and retention. By tuning in to employee sentiment – ​​and investing time and resources to create the benefits and culture employees want – small businesses can set themselves up for success today, tomorrow and for years to come.

Homebase can help

The economy and labor market are always changing, but one thing that never changes is the need for small businesses to attract, engage and retain great employees. While it’s been especially difficult over the past few years, small businesses have the opportunity to build and strengthen their teams with quality talent.

Homebase helps small businesses not only manage hourly employees, but also engage them in ways that build trust, loyalty and a culture that sets the business apart. Our convenient and easy-to-use app includes:

  • Online schedule And Time tracking Tools that give employees transparency and tools to manage shifts, hours, time off and payroll.
  • Built-in messaging To improve team communication and collaboration, including shout-outs for a job well done.
  • Pay in advance which come from homebase to give employees early access to their earned wages at no cost or liability to the business.
  • Built-in shift response And keep a pulse on the status of the performance tracking team.

Want to learn more about the future of local work? Check out all our reports and subscribe for future updates.

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