Newly released research finds the small business climate has greatly improved, and small companies are confident about the future.
The NSBA 2017 Year-End Economic Report from the National Small Business Association (NBSA) and online employment marketplace ZipRecruiter shows that small businesses have the most positive outlook in decades. For the first time since 1997, the majority of small firms – 53 percent – report increases in revenues, and even more – 84 percent – are confident in the future of their business.
Challenges Remain
“In the past two years, the number of small business owners who say they expect to see an economic expansion in the next year has more than doubled,” said Todd McCracken, president of the National Small Business Association. “Unfortunately, the ever-rising cost of health care remains the biggest challenge small businesses face.”
NSBA research also focuses on workforce issues, including hiring practices, automation, and recruitment and retention trends.
Although 37 percent of small business owners have increased part-time employees in the past five years, the majority are new part-time employees. On a more positive note, only 17 percent reduced current full-time employees to part time.
Impact of Automation
One-third of small businesses expect to implement some kind of automation in the next year.
However, only 9 percent say it will result in fewer employees. In fact, many more (24 percent) say it will result in needing additional employees.
Career Opportunities Abound
“We tend to think of corporate America when we think of career ladders, however small businesses have ample opportunities for career growth,” said Cathy Barrera, chief economist at ZipRecruiter. “Sixty-six percent of all small businesses offer opportunities for promotion, and at companies with more than five employees, that number rises to 85 percent.”
Small businesses also help facilitate career growth. Sixty-one percent offer on-site training for specific positions, while 26 percent pay for off-site training and 17 percent offer financial assistance for employees’ continuing education or certifications.
Employee Retention
NSBA research suggests that small businesses are successful when it comes to employee retention. A majority of small business owners reports that employees stay with their business for four or more years.
When employees do leave, they are most likely to work for another small business.
Recruiting and Hiring
Nevertheless, when it comes to recruiting and hiring research suggests there is room for improvement. Forty-five percent of small businesses do not provide job applicants with updates throughout the hiring process.
Among those business owners who do not provide updates, nearly one-fourth – 23 percent – say, “I don’t want to / it’s not worth it.”
Editor’s note: The NSBA report defines small businesses as firms with fewer than 500 employees.