Report: Small Businesses Struggle with Childcare & Employee Retention
A report released by Goldman Sachs highlights several problems holding small businesses back, including employee retention and child care Some 97% of small businesses seeking employees said hiring struggles were harming their bottom line. That’s a 17% increase since last year. Of those businesses having trouble finding employees, nearly three quarters said it was due to competition with larger employers that can offer better pay and benefits. Once they have those employees, small businesses have trouble hanging on to them, according to the report. Employee retention was a problem for 75% of small business owners.
Sometimes, employee retention comes down to retirement plans, and 39% of small businesses said they couldn’t afford to provide them. About 41% of small business owners said they offer these retirement benefits. That drops to 23% among Black small business owners.
The report said employee retention programs should be revised and new ones should be created. These revisions could include increasing awareness, making the claiming process simpler, and more prompt payments to small businesses. The Small Business Administration should also help increase awareness of paid leave options for small businesses. It should also be made easier for small business owners to obtain retirement plans for their employees.
According to the report, child care is one of the most significant challenges highlighted by the pandemic. In the U.S., 95% of child care providers are small business owners. More than half of small business owners, 55%, said they or their employees struggled with child care during the pandemic. Existing programs aimed to help small business owners provide employees with child care options see low adoption, the report said. About 80% of the surveyed business owners said they supported Congress taking steps to increase access to affordable childcare. The report said policymakers should incentivize and support small businesses pooling together to contract with childcare providers, which could make access cheaper.
They could also enhance existing tax credits for small businesses to access and sponsor child care. Or, policymakers could try to create a new tax credit for child care providers. These could offer extended or more flexible hours that could better suit the needs of small business owner