The recently released Q3 MetLife and U.S. Chamber of Commerce Small Business Index, hit its highest score since the start the pandemic as small business owners see an improving economy. The Index score, which measures small business owner confidence, jumped this quarter to 69.2 from 63.1 thanks to a nine-percentage point increase in the share of small businesses (33 percent) that say the economy is in good health. Sixty-six percent of small businesses also report that their business is in good health and 72 percent say they are comfortable with their cash flow. Both measures jumped several points from last quarter.
“Main Street employers are showing remarkable resiliency in the face of high inflation and a shortage of workers,” said Tom Sullivan, Vice President of Small Business Policy at the U.S. Chamber of Commerce. “With fears of a recession likely in the rearview mirror and inflation starting to ease, small businesses owners are feeling a lot better than they were a year ago.”
Over half (52 percent) of small businesses say inflation is their biggest challenge, still around a record high which has been consistent over the last year. This quarter there was notable concern about wage inflation as 56 percent said keeping up with employee salary expectations is a challenge.
Amid the ongoing worker shortage, there has been a slow uptick in concern for employee retention and being able to afford employee benefits. Small businesses are twice as likely to say employee retention is one of their biggest challenges compared to two years ago (15 percent vs. 7 percent in Q3 2021).
This quarter’s survey asked small business leaders about the unique benefits and advantages that small businesses can offer employees in a competitive job market.
Roughly nine in ten say their company feels like a family and that this environment has helped them retain employees (89 percent vs. 77 percent in Q3 2021). Similarly, 82 percent agree that small businesses are uniquely qualified to provide employees with connections to—and support from—upper management.
Most (70 percent) small businesses say they are actively addressing employee mental health as a priority right now, up from 60 percent in Q3 2021. Most (68 percent) report utilizing at least one resource to assist with employee mental health, including encouraging employees to take mental health breaks during work (32 percent) or offering partial or full reimbursement for childcare (32 percent).
As small businesses begin to feel more optimistic about the economy and their day-to-day operations, this quarter’s data shows a keen focus on improving over the long term by hiring—and keeping—the right talent.
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