Small Business Vs. The Labor Shortage

Kevin Kang 4 min read

If you're a business owner facing a labor shortage or declining productivity, you're not alone. The 2022 Guidant annual survey on Small Business Trends found that hiring and retaining workers were the biggest challenge for 55% of small businesses. Both customers and businesses are feeling the impact of this trend, with longer wait times, reduced operations, lower revenues, and greater employee burnout.

Losing employees can drain productivity in two ways, by losing their productivity and spending time finding and training replacements. This can cost businesses roughly $3500 per turnover in the short term. To adapt, many businesses have increased hourly pay, but this can be costly for small businesses.

However, there is a trend that could affect the future of business forever. Workers today are looking for more than just good pay, they want a strong company culture and mission. This is where businesses can differentiate themselves from the gig economy DoorDash and Uber.

One way to take advantage of this trend is to communicate growth opportunities to employees and offer revenue sharing as an aligned incentive program. By sharing a bit of overall sales or revenue, employees will take on a bigger ownership in the company and want to go the extra mile for customers. This can help lower the pressure on businesses in the current labor shortage.