Small businesses are the lifeblood of the economy – with 18 million U.S. workers employed by small businesses paid annually just through QuickBooks Payroll. And this year, they’re hungrier than ever to hire. QuickBooks research found that 89% of small businesses that currently have employees and 62% of those with no employees currently want to hire more in 2024.
In order to attract and retain top talent in this competitive landscape, business owners need to be aware of the latest employment trends so they can make informed decisions about their own hiring practices. This includes understanding what employees are looking for from their employers beyond pay, and how the macroeconomic environment is impacting people’s employment choices – all of which can help secure the right talent.
Here are a few trends that small businesses can take note of as they consider hiring this year:
Benefits packages can help retain talent
While many may consider a higher salary first when deciding on an employer, QuickBooks data actually found that healthcare is the most effective benefit for employee retention. In fact, 72% say it’s the most effective employee offering, versus 69% who chose Paid Time Off (PTO). Plus, this year, 27% of small businesses plan to expand employee benefits, and of these, 30% say healthcare in particular is the benefit they plan to increase. As a business grows, benefits packages – especially ones that can easily scale and change as a workforce grows and needs evolve – are one of the key areas to focus on to make the company more attractive to work for.
With employers and employees prioritizing benefits, finding the right benefits are critical. QuickBooks and Allstate Health Solutions recently partnered to help small businesses find, implement, and manage employee medical plans right in their QuickBooks Payroll account. Because figuring out the best solution can be overwhelming, dedicated agents are available to help personalize the package for every small business. With simple, integrated solutions like this, businesses can easily prioritize the benefits that matter most to the talent they want to attract.
Inflation is driving hiring decisions for workers
It’s no secret that inflation has impacted many businesses and employees. For employees, rising costs of daily essentials has tightened their budgets. Due to the cost of living increases, people are also finding it increasingly difficult to build personal wealth. These factors are ultimately driving people to look for additional sources of work to supplement their income.
This presents an opportunity for the 71% of small business owners overall who reported they plan to hire in 2024. Consider exploring a talent pool of people who are looking for a side gig that may have a set of skills that could benefit the business and complement your current team. This could include a wide variety of roles – such as social media manager, website or content creator, photographer, operations manager, or delivery person, to name a few. Hiring this type of worker can also be temporary, allowing flexibility to bring on more help when it’s busy, and scaling back during lighter times. Small businesses can tap workers in many ways, so it’s all about first identifying opportunities for growth, then finding the right people with the right skills to employ.
Skills-based hiring is on the rise
In the last year, skills-based hiring has become more popular – meaning employers are prioritizing the skills a candidate brings to the table over more traditional credentials such as a specific degree or years of experience. This trend emerged as a result of the labor shortage spurred by the 2022 Great Resignation, as many companies were struggling to find the right talent for their open roles. By loosening their requirements, a new pool of qualified people who otherwise would have been written off became prospective employees.
There’s also a great payoff for leaning into this trend. Research shows that skills-based hires have a 9% longer tenure at a company compared to a traditional hire. Take time to assess what is expected from a prospective employee, and whether the conventional requirements are truly needed, or if this role could be opened up to more candidates. It’s likely there will be a broader set of qualified people applying for the job.
By understanding the trends of what employees are looking for, business owners can more successfully secure top talent in today’s competitive market. With benefits offerings available from QuickBooks and Allstate Health Solutions, businesses can provide comprehensive packages needed to appeal to desired talent. Additionally, owners can recognize how inflation is impacting the employment landscape to make informed hiring decisions, while also expanding their talent pool by considering skills-based hiring. It’s been a bumpy road for small businesses over the past several years, with the pandemic, inflation, and overall rising costs. But small businesses’ plans to expand their bench of employees are a testament to their resilience and value to our broader economic landscape.