Small businesses have trouble hiring.
According to the July monthly employment report from the National Federation of Independent Business (NFIB), 19% of small businesses say that the inability to find qualified labor is the most significant problem facing their company, while 38% reported that they were unable to fill vacancies. Overall, 49% reported few or no qualified candidates for the positions they tried to fill.
“Most people who want to work have jobs, so there are very few people actively looking for work,” says Holly Wade, director of research at the NFIB. The U.S. unemployment rate hovered around 4% in 2024 — and while it has slowly risen, the talent pool for small businesses stays limited. In addition, the demographics of the workforce have evolved during the pandemic years. “So many baby boomers have retired, and we’ve had a huge shift in early retirement. All of that takes time to settle, so we’ve had this huge shift in the makeup of the labor market.”
Image Source: Zohar Lazar
How does this work for small businesses? Richard Grove is a good example, as he’s the founding father of The Small Business Consultant, which advises manufacturing and industrial corporations—and also the COO of a small company called Wall Control, which makes perforated-board storage and organizers.
He sees the problem firsthand, from many angles. Younger employees have been conditioned to think of school—and jobs that require a lot of education—as the best path to success. That signifies that craftsmanship “isn’t glorified,” Grove says.[Younger workers] “they don’t see their heroes doing that kind of thing,” nor are they encouraged to experiment with different professions.
That’s why when his clients ask him for hiring help, he recommends they introduce themselves to prospective employees where they work now—whether in school clubs or online interest groups.
Wade says hiring eager, enthusiastic candidates and then training them for the job is a smart strategy. A powerful company culture also can attract employees, so it’s price focusing on what makes working at a small company great—like the opportunity to learn from a place that cares more about you than a conglomerate.
It’s a winning formula for Leah Jensen, co-founder Parleaux Beer Lab. Brewing could appear “cooler” than pegboard manufacturing, but the hospitality industry is notorious for high turnover. “We’ve been very fortunate that many of our team members have stayed with us for a long time—more than three years on average,” he says. “Part of that success comes from prioritizing ‘fit’ over traditional skill sets. If we see someone who fits us, our team, and our customers, we’ll take the time to train them.”
To keep employees glad, Jensen also devotes resources to skilled development. “Whenever the company does well,” Jensen says, “we invest it back into the company and back into them.” That includes sending team members to festivals and team-building trips to learn and network, and investing in latest equipment or upgrades to make their jobs easier.
Ultimately, to recruit talented employees, a small business must present itself as a gateway to stability and opportunity. “If you may show [job candidates] “what the future looks like in the field, that’s your best bet,” Grove says. “All these people are walking around with their phones in their hands. So start a social media account, partner with an influencer in a similar space and tell them your story. Let them see first-hand what the opportunity looks like.”