US small businesses overwhelmingly point to difficulty hiring - and retaining - staff as their chief concern. That's according to data from a recent Goldman Sachs poll of 1,466 small business owners, conducted from January 10-13, 2022.

67% of those respondents said that they were currently hiring.

In addition, they are frustrated by a federal government response that seems limpid, at best.

Hiring:

• 87% of those hiring are finding it difficult to recruit qualified candidates for open positions
• 97% of those hiring say difficulty with hiring is impacting their bottom line (a rise from 80% in September, 2021)

Federal response:

• 67% of respondents feel the federal government is not doing enough to help with hiring challenges
• Only 8% felt the response was adequate

Quality of Applicants Dropping

This follows on the National Federation of Independent Business (NFIB) December 2021 Jobs Report. Forty-nine percent (seasonally adjusted) of all small business owners reported job openings they could not fill in the current period. In construction, 58% of firms had a job opening.

Small business owners’ plans to fill open positions remain at record high levels with a seasonally adjusted net 28% planning to create new jobs in the next three months, up three points from November and four points below the highest reading in the 48-year history of the survey set in August.

Overall, 60% of owners reported hiring or trying to hire in December, unchanged from November’s report. Ninety-five percent of those owners hiring or trying to hire reported few or no qualified applicants for the positions they were trying to fill. Thirty-one percent of owners reported few qualified applicants for their open positions, and 26% reported none.

Talent Scarcity: the New Normal

2021 has seen the tightest U.S. labor market ever recorded. At the close of 2021, employers were trying to fill 11 million job openings, but only about 6.9 million unemployed people were on the market. That record-low ratio of 0.6 unemployed people per opening means that competition is at a fever-pitch amongst employers. This is broadly good news for the workforce. Low-wage roles are seeing rapid upticks in compensation, with national chains like Chipotle voluntarily moving their starting minimum wages to $15 per hour. Amazon is offering its part-time employees health and retirement benefits. Cities in Massachusetts are offering snowplow drivers over $300 per hour. McDonald's franchises are offering applicants $50 just to show up for an interview.

On the flip side of that, employers see themselves struggling with quality and turnover. Jobvite data at the end of 2021 showed concerns about the trend. Recruiters list improving quality-of-hire as the top priority for 2022, with many of them concerned that cutting corners on talent will have longer-term, negative repercussions. They are also concerned, but at least temporarily resigned, that the trends away from candidate pipelining and employment brand initiatives will result in a continuous loop of talent scarcity. Proactive recruitment is largely out the window in 2022.

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