According to results of a new survey from the Small Business Association of Michigan in Lansing, the state’s small businesses continue to struggle with workforce shortages, inflation, and supply chain disruptions.
“Small business owners continue to face one obstacle after another, nearly two years after the onset of the pandemic,” says Brian Calley, president of SBAM. “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.”
More than half of respondents identified workforce shortages and inflation (56 percent) as primary issues, while 59 percent identified supply chain disruptions. Finding and keeping staff is seen as harder by 66 percent of respondents, and 70 percent are increasing wages to solve this problem.
Other key findings include 35 percent of small businesses have experienced a decrease in their workforce size, with 12 percent seeing a decrease of more than 20 percent. In turn, the cost of compensation has increased for 75 percent of respondents in the last year.
One third (33 percent) of businesses have flexible hybrid systems in place, allowing for a mixture of remote and in-person work. Slightly over two-thirds (67 percent) have social distancing protocols in place.
As for costs, 87 percent of respondents reported experiences higher costs than before the pandemic, including almost half (43 percent) reporting prices as substantially higher. As a result of all these factors, 14 percent of small businesses are still feeling pessimistic about the long-term survival of their operations. This is down from 16 percent in September 2021.
The survey of 600 businesses was conducted from Jan. 10-17.
The SBAM is focused on serving the needs of Michigan’s small business community through advocacy, collaboration, and buying power. It serves more than 28,000 members in all 83 counties of Michigan.