45% of small businesses polled in a recent study say they are stopping all hiring of new employees as a result of inflationary pressures. In addition, an average of 4% say they are cutting staff in order to remain in operation.
The new comes through a study from Alignable which polled over 5,000 small business employers from May to July of this year.
It's a sign of the immense pressure that businesses are under as a direct result of the Covid-19 pandemic: Customers dwindled initially due to the airborn nature of the pandemic. Now, while customers have largely returned, inflation has continued to grow due to a reduction in capable workers — Long Covid may account for 15% of all unfilled US jobs.
Businesses Are Limiting Hiring
Alignable polled 5,350 small business employers between May 10 and July 19, finding that 45% have put all hiring on hold. The worst hit were gyms, real estate, and transportation.
More specific findings from the study? 60% of all small business owners polled say that labor costs have rised, while 18% say that wages are now 25% higher than they were prior to the pandemic.
These are examples of inflation's impact on business decisions that align with pervious findings: A June McKinsey survey found that inflation now “tops the list of perceived economic hazards in respondents' home countries.”
That inflation — the highest in four decades — may be due in part to long Covid.
One analysis from January 2022 noted that two studies of long Covid patients identified 23% and 28%, respectively, had stopped working as a result of their condition. In addition, 46% of long Covid patients say they have reduced hours rather than stopped work entirely, as another study found. In all, 15% of the United State's 10.6 million unfilled jobs might be attributed to the pandemic.
What's in the Future?
The study found that 26% of all small businesses say that they have “fully recovered to pre-COVID revenue levels.”
Granted, that may not be a reassuringly high percentage. Still, the survey did find that 51% of businesses polled are still looking for more workers rather than freezing hiring altogether.
While the worst-off states include New Jersey and Florida, with both reporting over 60% of small businesses are freezing hires, the better-off states include New York, Massachusetts, and Colorado, where no small businesses say they will need to let employees go.
We'll have to weather the current inflation and economic downturn in order to see how well businesses will recover. Hopefully, the true impact of long Covid will become more clear in the near future, which may spur meaningful government action.
Until then, small businesses should keep streamlining their process with money-saving factors like high-quality Point of Sale systems — while their potential employees should pick which fields they apply to with an eye on how much competition they'll be facing.