Understanding the Current Labor Crisis: Key Insights
BizBuySell’s Insight Report, a treasure trove of crucial statistics and insights, provides a detailed look at the prevalent labor shortage and its associated hiring challenges that businesses face today. For a more comprehensive understanding of their most recent findings from the third quarter of 2021, as well as access to an archive of reports from 2013 onward, visit the BizBuySell website.
The ongoing pandemic has drastically “reshuffled the deck,” prompting many to reconsider their place in the corporate world. As we progress in 2021, businesses are on the road to recovery, yet the impact of the pandemic continues to influence their operations. According to the survey, 71% of business owners report facing heightened costs compared to pre-pandemic times. Most respondents indicated labor shortages as a significant obstacle, affecting both their hiring and employee retention capabilities.
As highlighted in the report, “Data from the U.S. Census Bureau reveals a 13.9% increase in retail spending in September compared to the previous year. Despite this, many businesses grapple with attracting and retaining employees. Almost half of the surveyed owners (49%) claim that the labor shortage is hampering their business, while Business Brokers perceive it as the paramount issue affecting small businesses.”
The fallout from the labor shortage extends beyond the visible problems. Given the public awareness of employers struggling to fill positions and raising pay scales to draw new employees, current staff are taking notice. With the realization that new hires are drawing higher salaries, existing employees are often demanding pay raises, leading to elevated operational costs for numerous businesses.
Interestingly, despite these challenges, business owners continue to sell for a variety of reasons. According to BizBuySell’s statistics, among the owners planning to sell, 20% attribute retirement as their chief reason for selling, while burnout is cited by 38% as the primary factor.
The data collated by BizBuySell reveals a 17% increase in transactions over the last quarter, although this figure is still 7% below pre-pandemic levels. However, projections suggest that the number of transactions in 2022 will surpass their pre-pandemic numbers.
For buyers and sellers alike, it’s essential to remember that the pandemic has irrevocably altered the business landscape, and its effects will persist in the foreseeable future. In essence, the business environment is in a constant state of evolution.
