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HR Trends For Small Businesses

Written by Ken Gaebler
Published: 4/30/2014

Score.org releases new numbers showing the connections between economic growth, small businesses and the HR trends that impact small employers.

Everyone agrees that small businesses represent a significant share of employers in the U.S. But recruiting and staffing the right workers isn't easy, especially in small organizations where time and resources are in short supply. And according to new numbers released by Score.org, small business success and HR success may be more closely connected than you think.

HR Trends for Small Business Owners

The new figures show that an overwhelming number of U.S. workers are employed by small businesses and that small or micro businesses are driving the nation's employment growth:

  • One-half of all U.S. workers are employed by a small business
  • Small companies generated 62% of new jobs from 2009 to 2012
  • Between 2004 and 2010, micro businesses added 5.5 million jobs, while companies with more than 500 employees lost 1.8 million jobs

But while it's clear that small companies continue to play a central role on the nation's employment scene, the challenges associated with small business staffing are becoming more complex and are incurring higher costs for small business employers.

With 30% of all small business failures directly attributable to bad hiring decisions, small businesses are struggling to perform high quality recruitment, hiring and HR activities:

  • On average, HR activities consume 25-35% of small business owners' time
  • Employers spend as much as 25% of their time handling employee paperwork
  • Small employers (fewer than 20 employees) report 60% higher HR compliance costs than their larger peers

The need for improved hiring and management is an important concern for all small business employers. Score.org points out that by 2015, 1.3 billion people worldwide will participate in virtual work scenarios, underscoring the need for employers to leverage mobile and other types of hiring and HR tools.

However, it's just as important for small business employers to work to retain talent by building the right company culture. By balancing autonomy, rewards, benefits and employees' contributions to the team, small businesses can reduce turnover and improve the quality of their workforces over the long term.

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