By Patti Greene
The conventional wisdom is that hiring is hard for small businesses because of what they supposedly lack: some combination of not being able to offer high enough wages, sufficient benefit packages, or fulfilling career ladders. But the results of our recent study, The State of Small Business in America 2016, flip much of this debate on its head, revealing that hiring is actually hardest because candidates lack the skillset that their businesses need. Put simply, small businesses have difficulty finding the right person for the job.
Most studies only focus on the skills gap in relation to large companies. And so we know what large companies say they need. A recent Innovation Learning Newsletter blog reported on four prominent studies as to what job skills will be most valued for the future of work. The Bloomberg Job Skills Report surveyed corporate recruiters (and included a very sharp interactive tool for looking at skills by industries). The World Economic Forum Future of Jobs Research surveyed primarily Chief Human Resource Officers of global employers. IBM produced their Global C-Suite Studies and the American Management Association (AMA) shared their Critical Skillsfindings as a result of surveying managers and executives.
Together, the results are quite consistent: the most critical job skills for the future are a mixture of creativity and problem solving, communication skills, and leadership/people skills. What is less known is this is also true for small companies, which is particularly noteworthy since nearly half of the private workforce in the United States works for small businesses. In fact, out of the more than 28 million businesses in the U.S., only 17,700 of them are considered big (more than 500 employees). The other 28.2 million are small businesses. What so few people realize is that small businesses, therefore, provide approximately 50% of private sector employment (including 37% of high-tech employment) and create over 60% of net new private-sector jobs (with thanks to one of my favorite websites SBA Office of Advocacy page, the FAQs).
With this in mind, how can we not be listening to the needs of half of America’s employers?
We must understand the employment needs and practices of small businesses, which given the numbers alone, are just as critical as those of large businesses. To dive further, we conducted a focus group of small business owners to do just this and answer some burning questions. What are the skills they need in new hires? Where do they currently look? And, perhaps most importantly, how can we address their hiring challenges? Here is what we learned.
Importance of trust, eagerness to learn, and culture fit
While there are critical job-related skills that require specific degrees, certifications, and the like, across the board, small business owners desire the same kinds of skills as large businesses, especially creativity, problem solving, and communication skills. Notably, small business owners have even more specific needs, and were unified in the priority of responsibility, punctuality and accountability. Regardless of business size or industry, focus group participants felt strongly about such fundamental skills, ones that transcend work and might even be considered ‘life skills.’ It is really about the people, highlighting the importance of trust and the almost family-style nature of a small business.
An ability to adapt is valued particularly as businesses pursue new opportunities and strategic change to grow. We heard from Lauren Schwartz, owner of TechWise Group, an IT services company, and Iveta Gigova, owner of ArcheWild, a native plant propagation and landscape services company, who found common ground in the fact that technology and manufacturing processes change so frequently that extensive experience is not the only necessary skillset in an ideal applicant. Both of these business owners are growing their businesses and need to hire for raw ability and a willingness, preferably even an eagerness, to learn. These qualities are critical as TechWise Group and ArcheWild plan to innovate and evolve their platforms over time, which will require skill growth and development to get to the next level. Each also highly values being able to communicate and work well with people.
At Babson, we’re proud that the 10,000 Small Businesses curriculum includes a focus on culture, which small business owners recognize is integral to business growth. And the business owners recognize that they need to define the culture of their businesses. Jennifer Sutton, owner of Gulf Coast Veterinary Services in the New Orleans area, shared that she looks for those quality skills, but for her it really means all employees need to have a compassionate concern for animals and their owners, not just for their job. For most, cultural fit prioritizes loyalty, being supportive to the company and those working within it. Small business employers importantly value an understanding of the types of behaviors expected for the company.
A small business hiring wish list
All of the participating small business owners shared some level of frustration over the time and effort needed to search for, interview, vet, and ultimately hire employees. At the same time, all offered concrete ideas about what might be useful to them and other small businesses to conquer the hiring challenge. What would small business owners like to have most to improve their hiring experiences?
We know that taking advantage of resources to hire the best people for your business can be a very wise investment. Going forward, let’s help tailor the resources out there to help small businesses better meet these needs.