Small business outlook: 4 things to know going into the holiday season

It’s been a tough couple of years for small business owners. And while things are looking up for many, there’s now a whole host of new challenges to contend with — the great resignation and an ongoing labor shortage, to name a few.

In 2021, we’ve seen a record number of businesses posting jobs on Homebase — and we’ve also seen a growing interest in team management solutions that help recruit and retain employees. It got us thinking: What’s really going on with small business teams? And what are the actionable insights owners need to know?

In recognition of Small Business Saturday, which kicks off the critical holiday season for Main Street businesses across the country, we surveyed 400 small business owners and 2,000 small business employees about their outlook for the holiday season and coming year.

Here’s what we found:

Owners are optimistic.

Many small business owners are feeling good about the upcoming holiday season, with 46% of respondents expecting to be more profitable this year compared with last year. Just 22% expect to be less profitable, and nearly one-third are unsure.

But while owners are optimistic, for many, the stakes are high.

“There are a lot of people who I see posting — myself included — this holiday season will determine how much longer they keep their doors open,” says Jennifer Archey, owner of The Playful Potter in Sparks, Nevada. “It’s unfortunate because most still haven’t recovered, even with the best of efforts…There is a change in the dynamic. I think a lot of people are ready to get out, which is exciting. But for many, I know there’s a lot riding on this holiday season.”

Employees are on the move.

Despite the labor challenges of 2021, some small businesses are planning to hire seasonal employees. In fact, roughly 35% of the owners we surveyed say they’ll hire at least one seasonal team member.

One of those business owners, Andy Sommer — the owner of Forth & Nomad lifestyle boutique and coffee shop in Houston, Texas — is hoping he’ll be able to staff up in time for the start of the season.

“Seasonal staffing is a real concern,” he says. “Retail is a tough position to staff because when you need people the most is when they want off the most. So, we’re solidifying staffing and making sure that we’ve got our labor allocation up correctly because, transparently, we absolutely need more people.”

Even after the holidays, it appears many small business owners will find themselves in a hiring position — this time, to replace existing staff. About one-third of employees intend to look for a new job in the next year or two, according to our survey. And they think it will be easier to find a new job in the next 12 months than it is today.

Employees are in the driver’s seat.

Given the changes in the labor market, more than 60% of small business owners say they’re paying employees more compared with this time last year. What’s more, both small business owners and small business employees think prospective employees have greater negotiating power when it comes to higher pay, more scheduling input, and better benefits than before.

Of course, while employees are in a position to negotiate around their schedule and pay, they’re also seeking a great place to work.

Here are the top 10 factors small business employees consider in a job offer:

1. Company leadership
2. Pay
3. Great co-workers
4. Flexible work hours
5. A predictable work schedule
6. Company culture
7. Learning and development opportunities
8. Company commitment to sustainability and the environment
9. A short commute
10. Health insurance

Team members highly value company leadership, as well as great co-workers and great company culture, among other important benefits. So, the businesses with the best chances of hiring the best teams — and keeping them around — will be those who provide thoughtful leadership and meaningful employee engagement.

Jeremy King, owner of The Watering Bowl doggy daycare and boarding in St. Louis, Missouri, is going the extra mile.

“It’s been very much a roller coaster these past few years, and the level of appreciation that I have for the folks that have been here with us through it all, I don’t even think I can adequately express,” he says. “We’ve increased compensation across the board for everybody over the last several months in a significant way. And we’re trying to give our staff some breathing room and allow some people to work from home when they can. Our business is not one that lends itself very well to working from home. But we’re trying to find ways to be more flexible when we can — and providing more structure around all of our positions to try to make it a more manageable situation for everybody.”

Tech can give small businesses a leg up.

A little tech can go a long way — whether you’re looking to make work easier or make your place a great place to work. And, there are lots of paid and free options out there depending on the type and size of your team.

Here are 5 ways Homebase can help every small business:

1. Simple scheduling: With Homebase, your schedule is online and always up to date for your team. You can adjust it from anywhere, and then instantly share it.

2. Built-in time clocks: Homebase turns (almost) any device into a time clock to help small businesses track hours, breaks, and overtime — keeping your business in compliance with local and federal labor laws in the process.

3. Painless payroll: Turn your timesheets into hours and wages in payroll with just one click. Homebase automatically calculates paychecks, sends direct deposits to employees and files your payroll taxes for you.

4. Messaging: Stay in sync and connect with your whole team — even when you aren’t there in person.

5. Cash Out and other perks: Homebase gives small business employees early access to wages with zero interest or fees, at no extra cost to business owners. Plus, the Homebase app comes with built-in team surveys, team recognition, and other tools that help keep teams happy and successful.

Try Homebase for free today.

Hear more straight from small businesses. Check out the new video series from Homebase — Grit & Greenlights: Small Business Stories with Matthew McConaughey.