Just like their big business counterparts, small business owners are feeling the crunch from the nationwide shortage of qualified labor, according to a recent study released by U.S. Small Business Administration.

Jere W. Glover, SBA chief counsel for Advocacy, released details from a report explaining the labor problem at the Vision 2000 Conference held in Washington, D.C. on December 1, 1999.

In 1998, almost one-third of businesses surveyed by Dun and Bradstreet reported problems hiring employees to fill vacant positions, Glover said. Those shortages show up as problems finding qualified workers at affordable wages, or trouble finding workers with the right skill levels, he said.

On average, small business owners are looking for workers with a high school diploma with 1-2 years of work experience; computer proficiency; ability to read, write and speak English; interact over the phone; and supervise other employees. These workers must also have a good driving record and be free from any substance abuse problems, Glover said.

"Our studies have shown that the largest impact of labor shortages--reported by

40 percent of surveyed firms--has been to lower employees' productivity and morale," he said. "In addition, many firms have seen a decline in product service or quality reported by 36 percent of the firms in our study."

In order to cope with the labor shortage, small businesses have adopted several short-term strategies, he explained.

• Approximately 53 percent have raised wages without raising prices on the products they offer, thereby cutting down on profits and keeping inflation low.
• About one-quarter of those surveyed have raised benefit levels in an effort to attract workers.
• Benefits include increasing vacation days or providing better health insurance, more flexible hours, and day care.
• Half of the companies with vacancies hired less qualified individuals than desired, even though it had a negative effect on morale and productivity.

Copyright 1999, CCH Incorporated. All Rights Reserved.

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