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GRBJ: SBAM data reveals small business obstacles

Survey shows workforce shortages, inflation, supply chain disruptions plague small businesses.

GRAND RAPIDS, Mich. — GRBJ — Michigan’s small businesses continue to struggle with workforce shortages, inflation and supply chain disruptions, according to a recent survey published by the Small Business Association of Michigan.

The survey also showed small businesses are offering higher wages to attract workers.

“Small business owners continue to face one obstacle after another, nearly two years after the onset of the pandemic,” said Brian Calley, SBAM president and CEO. “After dealing with closures and restrictions, there is a new set of significant challenges small business owners face. Workforce shortages, inflation and supply chain disruptions are prevalent issues that have the ability to jeopardize their success.”

Survey respondents overwhelmingly identified workforce shortages (56%), inflation (56%) and supply chain disruptions (59%) as the biggest problems facing their businesses.

Sixty-six percent of small businesses said it’s harder to find and keep staff. To combat that challenge, 70% of businesses are increasing wages to attract and maintain employees.

The survey of 600 Michigan small businesses, conducted Jan. 10-17, also revealed:

  • 35% of small businesses have experienced a decrease in their workforce size, with 12% seeing a decrease of more than 20%.
  • 75% of small businesses have seen the cost of compensation increase in the past year.
  • 67% of small businesses have social distancing protocols in place for employees.
  • 87% of small businesses are experiencing higher costs than before the pandemic, including 43% that report costs are substantially higher.
  • 14% of small businesses still are feeling pessimistic about the long-term survival of their business, slightly down from 16% in September.
  • 33% of small businesses have flexible hybrid systems in place, allowing for a mixture of remote and in-person work.

The results of this survey come just a month after SBAM in its fall Entrepreneurship Score Card report found the recovery of Michigan’s small businesses continues to lag behind the national recovery, according to a previous Business Journal story.

Calley told the Business Journal at the time the workforce shortages small businesses are experiencing today have been “20 years in the making.”

“History tells us that a growing economy does not solve the labor force participation rate problem that we find ourselves facing today,” he said.

He said although the market likely will find its equilibrium, there will be “winners and losers” in the process.

SBAM strives to serve Michigan’s small business community through advocacy, collaboration and buying power. The Lansing-based organization serves over 28,000 members in all 83 counties of Michigan.

This story originally appeared in the Grand Rapids Business Journal.

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