With Wall Street faltering and Silicon Valley slowing, Main Street maintains momentum; American appetite for experience drives biggest surge in business performance
SAN FRANCISCO, July 7, 2022 /PRNewswire-PRWeb/ -- The past years have brought major uncertainty and numerous challenges for small businesses. Yet on the heels of the COVID Omicron surge, amid record levels of inflation and a looming recession, new reports from Homebase, the one-stop-shop for small businesses to run great teams, show that local businesses continue to recover to pre-COVID levels of performance and even predict improvement on a key metric that's hamstrung local businesses in a red-hot labor market: hiring. A majority (57 percent) of small business owners now believe that it will either be easier or about the same to hire workers a year from now, marking an improvement from January 2022 (45 percent).
"The competition for talent has been fierce for years, putting intense pressure on local business owners to hire, train, and retain teammates as they have also had to navigate through the complexities of running a business during the pandemic," said John Waldmann, CEO and founder of Homebase. "As the overall economy cools, with several key equity market indicators down more than 20 percent, local businesses see an opportunity to both grow and improve the skills of their teams, which will benefit communities across the country."
These findings are from an online survey of approximately 400 small business owners conducted by Homebase in the middle of June 2022 to determine how they perceive the business and labor markets — and to understand how their perceptions may be changing as the environment changes. Homebase conducts Pulse Surveys throughout the year to add color and sentiment to the data shown in its monthly Main Street Health Report, proprietary data gathered from more than 100,000 businesses and two million hourly workers active on its platform in the US.
Quality over Quantity:
Local businesses are in no way immune to the macroeconomic trends threatening every tier of the economy. Inflationary pressures, including with respect to wages, are at a multi-decade high. Leading indicators such as consumer sentiment, small business owner sentiment, GDP estimates, and corporate earnings are trending downwards - all of which create uncertainty for business owners trying to weather the next pattern in an ongoing storm. The rising rents and real estate costs that plague both consumer and business sectors, top the list of this group's concerns as well.
That said, while some of the country's largest sectors and companies have announced layoffs, slowdowns, down rounds, and more, 92 percent of local business owners anticipate they'll continue to hire. And though the number of employees that owners aspire to hire in the next 12 months has been adjusted downwards:
- Only eight percent of owners surveyed predict they'll freeze hiring.
- The vast majority (58 percent) are planning on hiring one to five employees, an average increase of about 20 percent compared to January 2022. Roughly 75 percent of the businesses surveyed currently have eight or fewer employees.
- A full 11 percent are planning to hire 16 or more new teammates in the coming year.
- Yet while there's optimism for the coming year, there was a decline in the number of job postings in June, suggesting that recent market volatility may be causing employers to reel in hiring efforts and make fuller use of their current resources in the near-term.
And the biggest opportunity? Nearly 18 percent of owners ranked the possibility of hiring new workers with better skills as one of their top business opportunities this year.
"Being able to again compete for more skilled workers is a huge opportunity for local businesses, especially when you recognize that businesses in the entertainment and hospitality space are outpacing other sectors' growth, hiring at paces beyond pre-pandemic 2019 levels," continued Waldmann. "As Americans are hungry to gather and travel, the quality of these real-life connections relies on the service and skill of the teams on the ground to entertain, host, and serve."
Consistent with pre-COVID trends, entertainment and hospitality businesses are surging in the summer, as summer travel returns to pre-COVID levels and Americans are eager to gather *in real life:
- The number of employees working in Entertainment (up 21 percent) and Hospitality (up 13 percent), resemble the same period in 2019 before the pandemic.
- Beauty and Wellness (7% v. 3.8%), Caregiving (3.6% v. 2.9%), Retail (3.3% v. 2.9%), and Food, Drink, and Dining (2.5% v. 1.6%) had more employees working than the corresponding period in 2019, staffing up more this summer than they did for the summer season before the pandemic.
For more data, the full reports, local or regional perspectives, or to talk to a Homebase executive or business owner, please contact [email protected].
Homebase makes work easier for 100,000+ small (but mighty) businesses with everything they need to manage great teams: employee scheduling, time clocks, payroll, team communication, hiring, onboarding, and more. Just don't call us "Human Capital Management." We're tools built for the busiest businesses, so owners and employees can spend less time on bullsh*t and more time on what matters. Homebase is backed by leading venture investors including Bain Capital Ventures, Baseline Ventures, Cowboy Ventures, GGV Capital, and Khosla Ventures. For more information, please visit joinhomebase.com.
Homebase's Pulse Survey of nearly 400 small business owners was conducted online between June 14 and June 25, 2022.
Homebase's Main Street Health Report includes data gathered from June 12 and June 18, 2022 across its user base of more than 100,000 U.S. small businesses and two million hourly employees.
Kate Helete, Homebase, (805) 458 -5093, [email protected]