When it comes to attracting “the best and the brightest” employees, it is incredibly difficult for small businesses to compete with larger employers, in at least four ways: wages, benefits, perks, and recruiting programs.
When it comes to pay scale, most small business owners find it almost impossible to compete with most larger employers. According to a Bureau of Labor Statistics (BLS) report, titled “December 2013 Employer Costs for Employee Compensation,” private industry employers spent an average of $29.63 per hour worked for total employee compensation ($20.76 in wages and salaries, and $8.87 in benefits). Small business employers with a large number of minimum wage jobs available certainly can’t compete with these numbers.
And, for better or worse, pay scale is “front and center” these days with employees working in small businesses. LegalShield commissioned two surveys in 2014, one called “Small Business Survey 2014,” and the other called “Small Business Employee Benefits Analysis.”
One point noted in the first survey was that 55 percent of small business employers found it difficult to hire good employees.
In the second survey, it was reported that 61.7 percent of small business employees ages 18 to 34 said they had looked for new jobs last year, and 44.7 percent reported that they will be looking for new jobs in the coming year. And it’s not only younger workers looking to move on. It is also those who have more education, whether they be younger or older. The survey found that, while only 40 percent of employees working in small business who had high school or vocational degrees searched for new jobs last year, 54.3 percent with bachelor’s degrees did the same.
The number one reason these employees were looking for new jobs? Almost 50 percent (46 percent) said “better pay/salary,” while in distant second place (13 percent) was “better opportunities and advancement potential.” And, when asked how small business employers could improve job satisfaction, the number one response (57 percent) was “better pay, more raises, more money.” The second place reasons charted only 14 percent.
“Small businesses typically cannot attract top-quality employees, because their pay scales are far below those in large corporations,” said Jerry Thomas, president and CEO of Decision Analyst, the firm that LegalShield hired to conduct these surveys. “These percentages are not surprising in light of declining U.S. household incomes among the majority of the population. I don’t think you could conclude from these numbers that money is the most important aspect of their jobs. However, it is uppermost in their minds right now because of economic distress.”