Small Business Report 2024

Federal reports expect job growth and the economy to be sluggish in 2024, but small businesses plan to expand.

We asked employers if they were hiring within the next six months, and an overwhelming majority (96%) said yes. 

Zeroing in on the data paints an even more confident picture, with 80% looking for full-time hires and 50% seeking part-timers. Contractors and freelance workers will also feel the positive impacts, with 30% of respondents sharing that’s how they will fill open roles.

Although small businesses plan to hire, many enterprises face challenges with stability and growth due to the impact of inflation on spending, with 30% reporting uncertainty about the economy and consumer spending.

While market competition is the foundation of a healthy U.S. economy (1), increasing market competition is another hurdle for 41% of enterprises surveyed.

On the bright side, 62% reported growth over the past year. Conversely, less than 1.5% of small businesses struggle to stay afloat. A mere 9% noted a decline, but another 8% mentioned their business did experience a decline but is now rebounding.

What factors contribute to the growth of many small businesses? Their size, nimbleness, and adaptability can allow them to thrive in niche or local markets. Customer obsession (2) is the key to success here, making them the focal point of your business operations. This approach enables small businesses to be responsive to changing needs and circumstances.

And it adds up. Small businesses are the backbone of job creation, employing almost half of the private sector workers and contributing to 62.7% of the net jobs since 1995 (3).

One of the biggest obstacles is attracting top talent, with 43% of enterprises reporting difficulties and 41% citing increasing competition for highly qualified hires.

Once talent is acquired, retaining employees is another sizable concern for 35%, affecting the smooth functioning of businesses.

Alongside these primary challenges, secondary obstacles emerge. Thirty-four percent of respondents noted that limited resources for employee training are particularly concerning—possibly restricting the development and upskilling of new and existing staff. Funding to deal with increasing wages and inflation is also a problem (30%), with one respondent sharing, “People are seeking the highest salary even for non-high-paying jobs.”

Other small business challenges are the need for more qualified candidates (29%) and the waste of resources from candidate ghosting (24%). These issues add unexpected complexity to the hiring process, possibly slowing business growth.

Our findings shed light on effective small business recruitment practices. Surprisingly, a majority (49%) rely on employee referrals from their internal teams as their primary method of recruiting and hiring new talent. This practice speaks volumes about the importance of employee networks and the trust placed in these recommendations within smaller organizations.

Additionally, job boards emerge as a highly effective tool for nearly half (45%) of small businesses, slightly surpassing the effectiveness of their business career pages (44%). These numbers highlight the continued relevance of online platforms in the recruitment landscape, even for smaller enterprises.

We dug deeper to gain more clarification about the state of small business hiring and employee retention.

While 36% expressed satisfaction with the quality of their job candidates, a significant 30% were satisfied but found identifying suitable applicants time-consuming. Additionally, 22% believe there's room for improvement regarding talent quality, highlighting the need for more strategic approaches in recruitment.

While experts claim the Great Resignation ended in January 2024 (4), we sought confirmation from small businesses by asking whether they struggle with retaining employees.

Those who experienced high turnover were split, with 25% sharing that it impacts their business and 25% sharing that while they do have turnover, they can fill those positions quickly. It is important to note that most of those surveyed identified themselves as being in the retail (18%), food service (14%), or home service (13%) industries, which are known for their high turnover rates.

On the upside, 28% of those surveyed, the majority, shared they have a good employee retention track record. While this statistic doesn’t confirm the experts' view, it suggests the great resignation may be slowing down for small businesses.

Small businesses can boost their overall employee value proposition by offering perks and benefits to attract top talent. Health insurance (66%), paid time off (61%), and flexible work scheduling (50%) top the list of multiple choices small businesses offer.

Among the least offered benefits is childcare (12%). The Women in Leadership Report by Wizehire emphasizes that balancing work and family responsibilities is a significant obstacle for women seeking career advancement. Adopting this benefit can help small businesses secure the best candidates by supporting work-life balance, productivity, and inclusivity.

While many large companies are reducing their diversity, equity, and inclusive (DEI) efforts, small businesses are bucking the trend. Eighty-eight percent consider DEI extremely or moderately important.

Furthermore, 46% have taken proactive steps to implement employee diversity training. In addition, 45% have a diverse leadership team that actively promotes individuals from diverse backgrounds to higher positions. Moreover, nearly 40% of businesses regularly host open discussions and listen to employee feedback on diversity and inclusivity matters.

We explored how small businesses are generally perceived in the US based on the above. Pew Research Center (5) revealed that small enterprises appeal more to the general public than larger corporations. A resounding eight out of ten adults acknowledge the positive impact of small businesses on the country, with only 18% expressing a negative perception. Their efforts to create more inclusive workplaces are likely one of many reasons for this perception.

Core values and mission statements play a significant role in shaping company cultures. They inform how employees interact with each other and clients while driving decision-making processes. Nearly 38% of small businesses shared that their core values and mission statements shape everything they do internally and externally.

In contrast, 23% say their workplace culture is fluid and constantly evolving, so they don't have a set list of values or a mission statement. And we get that. Small businesses in their early stages are still finding their footing in this area.

The bottom line is that having procedures, training, values, and an HR team in place creates more harmonious workplaces. Ninety-eight percent of those surveyed agree with either one or multiple processes established.

Nearly 50% of small businesses have an HR team to handle employee conflicts, and 48% actively promote a culture of respect and professionalism. This not only helps avoid disputes but also inspires a positive work environment.

Furthermore, (42%) shared that they have a code of conduct that outlines steps for resolving conflicts, while (36%) encourage employees to reach a mutual agreement. Additionally, (32%) provide employees with conflict resolution and interpersonal skills training, further enhancing workplace harmony and collaboration.