To Hire Or Not to Hire: HR Issues Affecting Small Business in 2015

Business.com / HR Solutions / Last Modified: February 22, 2017

American small business employs the majority of the nation’s private workforce with 56.1 million jobs. Here's how they're doing in 2015.

American small business employs the majority of the nation’s private workforce with 56.1 million people. Compared to the 51.6 million employees in the enterprise sector, these figures alone show how impactful small business employment is on our economy and people.

According to ADP employment records, small businesses created 108,000 jobs in March 2015. As the year moves forward, so does small business hiring, albeit cautiously. As they look to slowly but surely add to their workforce, small businesses are tapping cloud-based tools to manage their staff and customer relationships.

From a management perspective, the biggest concern small business owners are facing in the HR realm is the cost of the Affordable Care Act’s implementation. Though they are feeling more knowledgeable about the law’s requirements, they are still concerned with the hefty cost associated.

To See The Results of These Studies and More, Download Our                                                                                                               State of Small Business in America Report Now

Hiring trends in small business

Of the 108,000 jobs in March 2015; firms with 1-19 employees created 57,000 jobs, while those with 20-49 employees created 51,000 jobs. Employment by firm size

“Compared to 2007, we are seeing an uptick in employment from small firms, but overall, there is still a lag from where they were before 2007,” says Christine Kymn Chief Economist at SBA. Indeed, hiring plans for many owners (34%) are flat compared to last year.

Related: Small Business Funding in 2015

Bureau of Labor Statistics data shows that startups now account for fewer jobs than in the past, which might surprise some given the current startup landscape. While the number of establishment births by mid-2011 is at a similar level to the first quarter of 1999 (when employment from startups peaked), employment at startups in the current data is only about 45% of that peak figure. 

Most small business owners (67%) have not hired in the last year. The top three reasons? Their business was not growing, they can’t afford to hire and they’re taking on any additional responsibilities themselves. 

Why small businesses aren't hiring

When businesses are looking to hire, they are particularly seeking experienced project managers, data specialists, skilled repair technicians and sales/business development professionals. 

Employee Management

Small business software has vastly improved in the recent years, especially with the rise of cloud solutions and free versions of enterprise tools.

Related: State of Small Business

Human resources software solutions are providing affordable management solutions for small business. They are designed to track goals, customer service, and employee data such as time sheets, benefit information, company documents and more. Popular solutions for small businesses are:

    • 7Geese tracks Objectives and Key Results by combining goal-setting with continuous feedback, coaching and peer recognition.
    • Bamboo HR lets small business owners abandon the spreadsheet and manage employee information with personalized software. It tracks time off, training and benefits and provides customizable fields and tables. It integrates with applicant tracking and payroll services as well.
    • BetterWorks lets small business owners align their teams via contextual feeds, push notifications and summary emails.
    • Zendesk is software specifically designed to make customer service better. It offers ticket views, triggers and automations.
    • 15Five focuses on organizing and facilitating communication between managers and employees.
    • Small Improvements tracks quarterly and annual employee reviews, offering small business owners tools for setting employee objectives. You can also use this software to communicate, praise effective outcomes and provide peer feedback as training is completed. 

To See The Results of These Studies and More, Download Our                                                                                                               State of Small Business in America Report Now

The Affordable Care Act & It’s Impact

Small business owners (84%) feel much more informed about the Affordable Care Act than they did in 2013. But improved education around the issue doesn’t change that they’re concerned about costs and losing valuable employees due to their inability to provide competitive benefits. 

A Kaiser Family Foundation study showed the connection between the size of a firm and whether it offers health insurance or not. Almost 50% of businesses with 3-9 workers offer health insurance benefits to their employees. The ratio grows to 71% for firms with 10-24 employees, to 85% for firms with 25-49 employees, and to 99% for firms with 200 employees or more.

What Can I Do About It?

Staying in the know and prepared will help you navigate hiring and employee management solutions in the upcoming year. Here are some tips on how to stay ahead of the curve:

Be competitive in hiring. With the current state of cautionary hiring, now is the time to be competitive with whom you hire. Tap hiring tools that help you discover and hire best candidates that will be integral in your continued growth. 

Utilize HR software. Affordable and user-friendly solutions have come booming onto the HR scene and revolutionizing the way companies are managing their employees.

Budget for the Affordable Care Act. With the recent changes in healthcare mandates for business, it’s vital that small business owners reevaluate their spending and budget for the unavoidable impact of providing healthcare.

To See The Results of These Studies and More, Download Our                                                                                                               State of Small Business in America Report Now

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