Small Businesses Face Tough Competition Attracting Top Talent According to Wells Fargo/Gallup Small Business Index
— May 3, 2005
Almost three in four small business owners say their most serious disadvantage when hiring new employees, compared with larger companies, is the ability to provide a competitive package of benefits (salary, health insurance, retirement, vacation). Wells Fargo today released these findings in the latest Wells Fargo/Gallup Small Business Index. The ability to provide healthcare benefits to new employees was the second most cited competitive disadvantage reported by sixty-eight percent of survey respondents. Additionally, sixty percent of small business owners see the amount of compensation they can offer an employee as a critical disadvantage when compared to larger companies. The Q1 2005 Index rose slightly from Q4 2004, from 106 to 110. The Index tracks six key measures for both current conditions and future expectations as reported by over 600 small business owners; current financial situation, revenues, cash flow, capital spending, number of jobs and credit availability. Approximately two-thirds of small business owners also report difficulty finding the right qualified employees for their businesses. However, sixty-nine percent say this has not hurt their business in the past 12 months. While only twenty percent say they are currently looking for new employees, if they had hiring needs today, fifty percent would be more likely to hire a temporary or contract worker than a full-time employee. “Finding the right employees is crucial to the success of our businesses,” said Ann Padilla, Owner of SunnySide Inc./Temp Side, a Denver-based staffing company. “The competitive challenges of hiring are offset, however, by the benefits small businesses offer: autonomy, creativity, flex time, and the opportunity to be part of something truly entrepreneurial. People are our greatest competitive advantage – and the ability to find qualified people is a major reason why small businesses have continued to grow.” Small business owners remain optimistic about the future. Eighty-two percent expect a positive financial environment over the next 12 months, seventy-five percent expect a positive cash flow and sixty-one percent expect revenues to increase. Ninety-five percent expressed feelings of success as a small business owner, and ninety percent say they are satisfied as a business owner. “Although faced with strong competitive challenges, industry data confirms small businesses generate the majority of all job growth in the United States,” said Rebecca Macieira-Kaufmann, small business segment manager for Wells Fargo. “Some hurdles remain - namely finding ways to offer competitive benefits packages – that’s why we spend so much time at Wells Fargo looking for solutions to help small businesses succeed financially, including our Simplified Employee Pension, 401(k) and business insurance options.”About Wells Fargo & CompanyWells Fargo & Company is a diversified financial services company with $436 billion in assets, providing banking, insurance, investments, mortgage and consumer finance to more than 23 million customers from more than 6,000 stores and the internet (wellsfargo.com) across North America and elsewhere internationally. Wells Fargo Bank, N.A. is the only bank in the United States to receive the highest possible credit rating, “Aaa,” from Moody’s Investors Service. Providing financial products and services to more than one million businesses with annual sales up to $20 million in all 50 states, Puerto Rico and Canada, Wells Fargo is the #1 lender to small businesses in the United States in total dollar volume according to the most recent CRA data (2003). The second largest national SBA lender in dollars, Wells Fargo is an SBA Preferred Lender in 28 states, and originated 3,555 loans for $495 million in 2004. Wells Fargo has also been ranked the number one SBA 504 lender nationally for the last two years. Its targeted business services programs provide outreach and education to women, African American, Latino, and Asian business owners about financial services. Since 1995, Wells Fargo has loaned more than $23 billion to women and minority business owners. About the Gallup Organization For more than 60 years, the Gallup Organization has been a recognized leader in the measurement and analysis of people’s attitudes, opinions and behavior. While best known for the Gallup Poll, founded in 1935, Gallup’s current activities consist largely of providing marketing and management research, advisory services and education to the world’s largest corporations and institutions.