As small business owners’ optimism (64%) and plans for growth (75%) remain steady, their hiring plans have increased from a year ago, according to the 2016 American Express OPEN Small Business Monitor. The annual survey found that nearly four-in-ten (39%, up from 34% last year) small business owners plan to hire staff over the next six months, signifying a return to pre-recession hiring intentions. However, for the first time since 2007, finding the right staff has emerged as the number one challenge to growth (19%).
As entrepreneurs look to meet their staffing needs, part-time workers are the most sought after employees. Over the next six months, 16% of small businesses plan to hire part-time employees, 13% plan to hire full-time employees and 11% plan to hire a combination of both full and part-time employeesi.
“We are seeing a renewed focus on hiring, as businesses manage by the mantra of ‘you are only as good as your people,” said Susan Sobbott, president, Global Commercial Payments, American Express. “However, it is also apparent many small businesses are encountering difficulties finding the right talent, which is ultimately proving to be a significant challenge to their growth.”
While the majority of small business owners identify themselves as optimists and “see the glass as half full” (84%), retirement concerns are on the rise. Although business owners believe they will need $30,000 less, on average, to retire than estimated last year, a greater number (53% up from 47% last year) are worried about their ability to save for retirement.
Women Small Business Owners Earning Less than Men
The number of small business owners who pay themselves a salary is down year over year (51% vs. 57% last spring). However for entrepreneurs who are taking a salary, they are paying themselves $76,010, an increase of $2,310 from last year. Male business owners are more likely to pay themselves a salary compared to women business owners (57% of men vs. 42% of women) and on average they pay themselves $17,470 more than women.
Growth Plans Remain Steady but Capital Investment Plans Decline
Although business owners are slightly more confident in their ability to access capital needed to grow their businesses (83% vs. 80% last year) and concerns around cash flow are down (36%, vs.45% last year), plans to make capital investments over the next six months are declining (51%, down from 56% last year). Additionally, while three-quarters of business owners plan to grow their business, steady year over year (75%, vs. 76% last year), growth is not their main concern. The top priority for business owners over the next six months is maintaining their current business and sources of revenue (39%). To support their goal, business owners say they will place a heightened focus on better servicing customers to set their business apart from competitors (84%).
Economy Will Influence November Vote
Although nearly two-thirds of entrepreneurs (64%) have a positive outlook on the economy and their own business prospects over the next six months, the economy is the issue that will most influence their vote in the November presidential elections (32%), followed at a distance by tax policy and healthcare (each 16%), and immigration (6%).
Additional survey results including findings by gender, industry and geography are available by contacting Alex Della Rocca at 212-539-3203 or email@example.com.
American Express OPEN Small Business Monitor, conducted since 2002, is based on a nationally representative sample of 739 U.S. small business owners/managers of companies with fewer than 100 employees. The anonymous survey was conducted via telephone by Ebiquity March 1-21, 2016. The poll has a margin of error of +/- 3.6% at the 95% level of confidence.
About American Express OPEN
American Express OPEN is a leading payment card issuer for small businesses in the United States and supports business owners and entrepreneurs with products and services to help them run and grow their businesses. This includes business charge and credit cards that deliver purchasing power, flexibility, rewards, savings on business services from an expanded lineup of partners and online tools and services designed to help improve profitability. Learn more at www.OPEN.com and connect with us at openforum.com and twitter.com/openforum.