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Majority of Small Business Owners Raised Wages to Fight the Great Resignation

According to Guidant’s annual Small Business Trends report, companies are focusing on increasing compensation and employee retention.

The top two Great Resignation strategies of American small business owners were increasing compensation (63 percent) and employee retention (33 percent), according to the results of the latest Small Business Trends report released by small business financing company Guidant Financial. Other predominant strategies included expanded advertising (23 percent), increasing benefits (18 percent), and hiring bonuses (16 percent). The report’s findings are based on the annual Small Business Trends survey conducted by Guidant Financial.

“Starting a small business has always been hard work, but the past few years have been exceptionally challenging. We owe a lot to the small business owners that have persevered through it all — they’re on the front lines defending the American economy,” said Jeremy Ames, president of Guidant Financial. More key findings are below.

The Great Resignation

  • 47 percent of businesses report insufficient job applicants, and 30 percent report experiencing head-hunting competition from competitors.
  • According to respondents, communication and critical thinking are the most commonly lacked skills in existing small business applicants.
  • Business owners that raised wages were slightly more likely to be profitable (70 percent) compared to those that did not (65 percent).
  • Despite challenges, 75 percent of business owners report being somewhat or very happy. 15 percent were somewhat or very unhappy. The remaining 10 percent were neutral.

Business Owners

  • The majority of businesses were split evenly between Boomers (45 percent) and Gen X (46 percent). Millennials made up 7 percent of those surveyed, while Gen Z — also called Zoomers — and Post War Era business owners were both less than 1 percent.
  • Women small business owners made up only 22 percent of survey respondents this year.
  • Thirty-two percent of small business owners did not belong to or feel represented by any political party. Forty-one percent identified as Republican, and 22 percent percent identified as Democratic. Less than 6 percent identified with another party.

State of Affairs

  • The top three priorities were increasing staff (51%), expanding, or remodeling their business (41 percent), and investing in digital marketing (40%).
  • Sixty-nine percent of franchisees own locations less than 5 years old (or in the process of opening).
  • Behind recruitment (70 percent), small business owners most common problems were changing operations in response to COVID-19 (32 percent), lack of capital/cash flow (32 percent), and administrative work (23 percent).

COVID-Related Findings

  • Fifty-four percent of all business owners feel the effects of the pandemic are not over, and yet 84 percent of business owners expect their business to survive the pandemic.
  • Most respondents reported feeling somewhat or very confident (46.74 percent) about the future. Just over 27 percent of business owners reported feeling somewhat unconfident, and a minority 7.56 percent of business owners reported feeling very unconfident.

Methodology

The report’s findings are based on Guidant’s annual survey, reaching out to the resilient, hardworking small business owners of America. It learns who they are, what their lives as small business owners are like, what their plans for the future are, and how their business has weathered current affairs. Guidant Financial conducted the email survey from January 24th and February 13th with over 600 current and aspiring small business owners nationwide taking part.

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