Small business owners know they have to run lean or join the 50 percent of small businesses that fail after five years.
What’s more frightening is that percent only grows as time passes. Only 30 percent of small business owners hit their 10-year mark.
These rates have remained consistent over the years, however, they don’t account for the mass shuttering prompted by the COVID-19 outbreak. In a survey of 5,800 small business owners, 43 percent reported they had closed temporarily, almost all due to COVID-19. Additionally, 39 percent of those surveyed had reduced their employment by 39 percent.
Needless to say, business leaders have had to be extremely adaptable and creative over the past year, especially those with small companies. Those leaders that have kept their heads above water during COVID-19 have done so by being flexible, adapting to consumer and client’s new needs, collaborating, and looking at our current working style as permanent.
The truth is, owning a small business has always been a challenge, but in a post-2020 world, the obstacles are even larger. Business owners that haven’t found operating efficiencies are already far behind and at risk of joining a club no business owner wants to be part of.
To succeed in 2021 and beyond, small business owners have to address the real issue head-on: how to get the skills they need in an affordable and efficient way.
There’s a way to do it, but only six percent of executives believe it’s the answer.
Skills gaps already put small businesses at a disadvantage
Small business is no stranger to skills gaps. The topic has been discussed for years, with articles offering creative tips for small biz owners to creatively close those gaps. In a 2016 poll, for example, 29 percent of small business owners said their employees have insufficient credentials. Employees that they had a hand in hiring. In the same poll, 34 percent of those respondents said it is difficult to find candidates with the right qualifications for what they need.
That was five years ago, which is a lot of time for those numbers to inflate. And they have.
In a January 2021 McKinsey report, 87 percent of business leaders said they are struggling with a skills gap within their company or expect to in the next few years. The remaining 13 percent either has it all figured out or are in for a big surprise soon.
Those that are struggling to get an insufficient team to perform will stunt growth at best. At worst, a business will die. What will keep it afloat, though, is maximizing a team’s strengths while utilizing creative ways to fill in the gaps.
However, most businesses don’t have the budget to bring on new hires, or the gap is too small for a full-time role and is just left to fester.
Lack of trained talent is affecting the economy
Limited skills aren’t just a small business problem: there is a skills gap so large that it is changing our economy.
Technology has evolved so rapidly over the past decade that few people have the tools needed to successfully keep up and provide expert services. And, like how the pandemic has affected small businesses, it is also speeding up technology that is further driving the skills gap.
With much of the population forced to live a remote lifestyle, they’ve been relying more on conveniences technology offers. From online shopping to zoom communication, TikTok, and more, we are living in a society that depends on technology to function. This dependency, however, is outpacing supply, with experts concerned that there is not enough skilled talent to cover consumer needs.
“Many predict that the new wave of e-commerce triggered by shelter-in-place mandates will be here to stay, which will further drive demand for software engineering, data analytics, and digital marketing skills, which were already difficult to find,” Vera Song writes in this EdSurge article. “Through 2022, half of all planned cloud migrations will be delayed by two years or more due to the lack of trained talent.”
Flexible talent is the only way to close this widening gap
In the McKinsey report referenced earlier, global executives gave insight on solutions to close the skills gap. More than half (53 percent) said reskilling their existing employees will be the answer for their company. However, that’s what they’ve already been doing and the results are subpar.
Those same executives were polled on how often skills-building programs succeed within their organizations. Only three present said “Always,” and 30 percent said “Often.” The majority of business leaders (51 percent) said these initiatives “Sometimes” work.
Taking on a training initiative is something that costs money, takes time, and has an unfavorable success rate. Interestingly, the golden-ticket answer was right in front of them, however, only six percent chose flexible talent as a solution.
Over the past couple of decades, companies have emerged strictly for this purpose. Known as talent-matching platforms, the purpose is to cut down on the time it takes to hire talent, the cost of the hire, and providing talent with the exact skills needed to fill company gaps. No more, no less. Businesses only pay for the talent they need and however long they need it.
This fits perfectly with small businesses’ needs, as there are plenty of gaps to fill. However, small business owners can’t afford a full-time employee for a part-time responsibility. Flexible talent allows small business owners to fill the gaps at a fraction of hiring full time.
In addition to being able to fill in skill gaps as needed, businesses that use talent-matching platforms like FlexTal are not tied to a long-term commitment. The inherent ‘try it before you buy it’ model skirts costly bad hiring moves and connects business owners with an expert that has a unique skill the business needs. The fluid and flexible nature of these platforms make it so business owners are no longer tied to insufficient talent and costly hiring practices.
Lindsay Patton is a self-employed writer and social media strategist. A leader for most of her career, Lindsay has managed more than 250 direct employees and loves mentoring young talent to help grow their skills. She spent seven years as a reporter and editor and is still an active writer and journalist. In 2016, Lindsay started taking social media seriously and the skill quickly became one of her specialties. Within the past two years, Lindsay has been invited to speak on social media and leadership in the workplace by Ernst & Young, Social Media Day PHL, The W.E.L.L. Summit, and more. She has found happiness in the self-employed life because it allows her the flexibility to spend quality time with her husband and their two goofball dogs.