Despite Resource Constraints Small Businesses Investments in Workforce Drive Growth, According to New Study

A new report released found that small businesses lead workforce investment and economic growth. Despite resource constraints, small businesses surveyed reflected a commitment to wage growth, healthcare, and workforce training.

The report, “Voice of Small Business in America: 2019 Insights Report,” summarizes findings from a survey of 2,285 small business owners who have graduated from Goldman Sachs 10,000 Small Businesses.

Key findings from the report include:

  • Workforce challenges: The #1 challenge for small businesses is still hiring and retention, with 76% reporting difficulty to attract, hire and retain employees. When reviewing candidates, respondents prioritized attributes like a positive attitude, willingness to learn and integrity over work experience and education.
  • Impact of automation: Though 71% have introduced some form of automation only 5% have laid-off employees due to it, while 35% transitioned their existing employees into new positions and 32% hired new employees.
  • Capital challenges: 80% of respondents relied on personal finances to start their business and nearly half continue to rely on their personal finances to sustain and grow their business. Successfully securing external capital is a greater challenge for business owners of color, who were more likely to apply for funding than white business owners, but two times more likely to receive no funding at all.

According to the report, small businesses employ nearly half of the American workforce. The findings highlight the need to continue dedicating resources to small businesses, while fostering greater knowledge-sharing and dialogue between small business owners, capital providers, and policymakers to unlock greater economic potential.