Small businesses are losing a labor war against midsize and enterprise businesses. They tend to have less money which can translate into less support for their workers. One of the main reasons people leave their jobs is because they do not have attractive offerings that can support their livelihoods.
Even as the original threat of the pandemic wanes and unemployment is at a reasonable all-time low, at 3.6%, small businesses are still being challenged with labor shortages. After two years of the pandemic, it is getting increasingly more expensive for owners to maintain their businesses due to high turnover rates and the constant need to recruit workers. The only solution is to offer workers support that holistically takes care of their needs holistically and demonstrates to workers that small business owners care about them and their well-being.
Last year, 4 million people quit their jobs because they were not receiving enough pay and support from their employers. Half of all small businesses are finding that their roles are staying vacant. 29% have said they have been vacant for more than three months. Most small businesses also predict that retention will continue to be problematic for them for the next six months. While enterprise companies have the money to support their workers and offer salary raises to compete with growing inflation, small businesses struggle to keep up.
The truth is that the cost of recruitment between a small business and an enterprise is the same. Yet, small businesses suffer more because they have less disposable income to invest in recruitment and offer their workers with attractive packages to support their well-being and livelihoods.
Plus, a lot of small businesses are lowering the amount of full-time roles available. There is a higher likelihood that workers will have to work on a contract or part-time, which means they usually don’t qualify for workers’ benefits. Workers are already struggling to manage increasing responsibilities at home due to childcare and eldercare industries taking a turn for the worse during the pandemic. They may also be struggling with higher rates of mental and physical health problems due to the stress of the pandemic as well. Small business owners who typically don’t provide support for their workers are going to suffer the most.
Small businesses are struggling to provide adequate health and well-being support for their workers. While 71% of small business owners say they are prioritizing their workers’ health and well-being, only 60% of workers would agree with them. That may be the majority of workers; however, there is still a discrepancy regarding whether small business owners are doing enough. At least 33% of workers consider their employers’ support in their health and well-being to be vital to whether they will stay or leave their jobs.
Health support for small businesses is the most expensive benefit; that just covers health insurance. The annual cost per worker is typically $4,142. Unfortunately, health insurance does not cover all a worker may need in order to support their well-being. They may be stressed because they have growing responsibilities at home which affect their mental, emotional, and physical health. They may have growing debt that is also affecting their health. They may need support with their diet to manage their overall health.
Medical insurance is one expensive aspect that does not tackle all the needs of workers regarding their health and well-being. In addition, most small business owners say they run across unexpected costs later down the line associated with providing medical benefits, and those benefits do not adequately provide support.
Typically small businesses have less access to time and additional resources to understand, vet, and select the best workers’ benefits and support. Only 62%, compared to 80% at enterprises, understand what they are actually offering to their workers. Small business owners may face challenges in finding and devoting time to research their offerings and competitors’ offerings to compare and still manage their businesses. Plus, there is the added work of vetting and signing individual contracts with each and every provider a small business wants to work with. Most small businesses do not have a human resources department dedicated to this work, and the owner is left to pick up the slack while other responsibilities continue to loom.
Empleo can offer solutions to small businesses that help them retain and attract talented workers. Empleo’s platform has such a diverse set of offerings that can help workers with future planning, family support, basic needs, financial wellness, health and well-being. Small businesses can offer their workers more for a cost that works especially for their budgets each quarter.
Small businesses are able to give workers a lot more flexibility using our platform. The employer is only paying a set amount, the worker receives credit per month, and they choose what they want to use it on. Rather than paying extortionate health insurance costs, workers are getting much more support that tackles all aspects of what may be causing them mental, emotional, and physical discomfort.
Empleo takes the pain away from small business owners with a limited amount of time and resources to vet and understand each provider and what they may be providing their workers. Empleo has already done that work, and our platform is very transparent about the type of services available to workers.
Small businesses that cannot offer full-time roles to most of their workers can provide all of them with support, no matter whether they work part-time, gig, or apprenticeships. Workers are more likely to stay in positions they feel provided for no matter what type of arrangement they are in.
Empleo was built on four pillars: compassion, empathy, vulnerability, and awareness. Small businesses that show they exhibit these values and care about their workers’ needs are likely going to keep their workers. They are providing a safe work environment where workers feel that they are valued, and their struggles outside of work can be managed.