Recruiting

Study: Small Business Struggle to Attract Talent with Competitive Benefits

Enticing jobseekers with competitive salaries and perks is a struggle many small businesses (SMB) owners are facing in the year ahead, finds a new study by Oasis Outsourcing, a professional employer organization.benefits

Oasis’ latest study finds that small business owners believe attracting strong, competent management and dedicated, capable staff plus offering competitive compensation and benefits will be the top two most challenging issues businesses face in the next 12 months.

According to the study, employers listed these responses as the most challenging issues in the year ahead:

  • Attracting strong, competent management and dedicated, capable staff (33%)
  • Offering competitive compensation and benefits (31%)
  • High employee turnover (26%)
  • Developing employees and future leaders for succession (23%)
  • Building a positive brand and culture (20%)
  • Maintaining ongoing regulatory compliance (19%)
  • Measuring and managing employee performance (18%)
  • Managing the hiring process and tracking applicants—e.g. posting jobs, tracking the flow of applicants, onboarding, etc. (16%)
  • Creating operational efficiencies with overall HR administration (16%)

“Small businesses need to compete in a tight labor market with much larger employers—that can offer more robust compensation and benefits packages to lure and retain the best talent,” says Gerald Purgay, Chief Marketing Officer with Oasis. “This issue was of greater importance to those small business owners/managers employing more than 20 people (32%) who had been in operation for 10 or fewer years (35%).” Now, with companies like Amazon and Google moving to the East Coast, competing with these tech giants makes it that much more difficult for small businesses to compete and stay relevant.

“Running a small business requires leading a motivated group of people to be as productive as possible so you can drive growth and manage and reduce costs,” says Purgay. “But finding and keeping quality talent is tough. As the survey results demonstrate, people management can be time-consuming, complicated and costly.”

Purgay suggests, “[t]o find and keep the best people, small business owners need to continuously explore options to offer great benefits and competitive compensation—these are the table stakes. But it takes more than this to attract the best and brightest. Today’s job seekers consider all aspects of a company—fit, culture, reputation, and the ability to have a work/life balance.”

Purgay observed that savvy SMB owners outsource nonrevenue producing tasks like HR administration. “Only 14% of survey respondents said they had experience with outsourcing HR administration, and a further 7% reported they ‘didn’t know this was an option.’ Which opens opportunities to more broadly socialize the value of having an HR partner to help drive their workforce and people initiatives and help them to keep a competitive edge.”

For those with experience in outsourcing HR administration, the top three services most frequently outsourced were payroll administration (58%), 401(k) (42%), and benefits (40%).

About the Study

The study was compiled using data from a survey that was conducted with 289 U.S. small business owners and managers who employ between 10 to 99 employees. Nearly all (93%) of the businesses were privately owned and 73% operated from one location. Most reported revenues in excess of $1 million (61%). A wide range of industries was represented. The online interviews took place between November 8 and 20, 2018 using a National Web Panel by SSRS, an independent market research company located in Glen Mills, PA.