Welcome to the Small Business Weekly Rundown. Each week, we bring you stories and trends that impact small business owners and their workforce.
Small Business News Highlights:
- Job openings hit historic high as federal jobless benefits expire
- Almost half of U.S. small businesses don’t have cash to cover 3 months
- Waiting to return to the office is costing employers big time
- Ongoing labor shortages giving boost to workers unions
Job openings hit historic high as federal jobless benefits expire
“For economists, this is a big mystery: If businesses are trying to expand and there is a big pool of unemployed workers, in normal times we would see big jobs growth. That matching isn’t happening.”
As federal unemployment benefits ended last weekend, economists continued to record bewilderment at the fact that job openings outnumbered the unemployed by approximately 2 million.
The historically high number of job openings has been attributed to the federal unemployment subsidy, though states that ended the $300 weekly benefit early did not see huge drops in their number of job vacancies.
Additionally, many analysts point to the fact that a percentage of people who left the job market during the pandemic did so because of concerns about catching the virus and other non-monetary reasons.
Despite the number of unfilled jobs, government data suggests that the economy is still down over 5 million jobs since the start of the pandemic in early 2020.
Almost half of U.S. small businesses don’t have cash to cover 3 months
“I would rather pay my staff than buy a new van and I think everyone is thinking that way right now. It’s rough out there for small businesses.”
A new report finds that 18 months into the COVID-19 pandemic, only 44% of U.S. small businesses have enough cash on hand to cover 3 months worth of operating expenses.
The report from Goldman Sachs found that Black small business owners fare even worse, with 51% reporting that they have enough reserves.
In addition to low cash balances, many small business owners say they’re concerned that they’ll be able to pay back the mounting debt they’ve acquired during the pandemic due to Delta variant surges that have tamped down consumer enthusiasm.
Waiting to return to the office is costing employers big time
“Can we afford the luxury of bringing our employees back into the workplace?”
Companies across a wide range of industries have postponed their return-to-work plans, kicking off the “The Great Wait” as employers wait for more signs that the risk related to COVID-19 has decreased.
While many employers worry that bringing back employees prematurely could end up costing them, others point to the increased costs related to surveillance, sick time, and reasonable accommodations for at-risk employees.
Ongoing labor shortages giving boost to workers unions
“The cost of recruiting and training a new workforce would’ve cost Volvo 10 times what a good contract would have.”
The continuing labor crunch has caused some labor union representatives to take a harder line when it comes time to negotiate contracts.
Raises, signing bonuses, and lower healthcare costs are all on the negotiating table as union leaders capitalize on the fact that it would cost employers more to find, hire, and train new workers instead of giving into the demands of their current workforce.
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Finally, before we say goodbye for the week, here are 3 things you should know:
- Full FDA approval of the Pfizer and Moderna COVID-19 vaccines may mean that a surge of employer vaccine mandates is coming down the pike next quarter.
- In response to the coronavirus, many employers are looking into launching their own on-site health centers, but employee privacy may be a hurdle.
- Finally, if your workforce seems tense, consider making a play out of Nike’s playbook and give the entire office a week off to destress.