Small businesses continue to contend with supply chain disruptions and staffing shortages
On Jan. 13, the NFIB Research Center released its 21st survey on the impact of COVID-19 on small businesses. The survey found that the recent increase in COVID-19 cases has negatively impacted about two-thirds of small business owners to varying degrees.
“The COVID-19 pandemic, exacerbated by the recent surge in COVID cases, continues to disrupt small business operations and sales,” said Research Center Executive Director Holly Wade. “Staffing shortages and supply chain disruptions also haven’t eased for small businesses despite owners attempts to raise compensation and adjust business operations to accommodate.”
The survey was conducted at the end of December and the beginning of January.
Key findings from the survey include:
- Eleven percent of owners reported the surge in cases has a significant impact on their business, 23% reported a moderate negative impact, and 34% a mild negative impact. Nineteen percent of those negatively impacted said that the rise in cases has significantly impacted employee work attendance.
- Forty-three percent of owners say they are experiencing a moderate or significant staffing shortage. It remains a key issue for small business, as 25% of them say the shortage has worsened in the last three months while another 45% say it is about the same.
- Thirty-seven percent of owners reported that they have experienced a moderate or significant loss of sales opportunities from the staffing shortage. This is down from 51% in Oct. 2021, when the last NFIB COVID Survey was conducted. The reduction is likely due to more owners successfully adjusting operations to accommodate new circumstances.
- Supply chain disruptions remain a key concern, with 92% of owners reporting that such disruptions have impacted their business. In fact, 47% of owners reported that the impact is severe.
- Less than half of owners (44%) report that the impact of supply chain disruptions has worsened in recent months. This is a significant decline from the 62% who reported the same in October.
- Small employers facing staffing shortages are making adjustments to attract applicants for open positions. A few of these changes include: 83% of respondents have increased wages, 24% have increased paid time off, and 29% have offered or enhanced health insurance benefits.
- Due to the ongoing worker shortage, the vast majority (88%) of owners are working additional hours themselves. Forty-three percent of owners have offered more hours to part-timers instead, and 61% are offering overtime.
- More drastically, 38% of owners experiencing a staffing shortage have adjusted business hours, 33% have introduced new technology to their business model, and 29% have reduced the products that they offer.
- Sixty-four percent of owners have raised prices in response to supply chain disruptions and increased labor costs. Of those owners, about two-fifths (41%) raised prices by 10% or more.
- Most small business owners reported that their local economy remains below pre-crisis levels of economic activity. Only 21% of owners reported that economic conditions are back to normal now in their area.
- Thirteen percent of owners anticipate an economic recovery in their first half of 2022 and another 27% report the second half of 2022 before economic conditions return to pre-crisis levels. Thirty-nine percent of small business owners expect conditions not to fully improve until 2023 or later.
- This publication marks NFIB’s 21st Small Business COVID-19 survey assessing the health crisis’s impact on small business operations, economic conditions, and utilization of the targeted small business loan programs. The full edition of the 21st survey can be read here.
NFIB wants to know how COVID-19 has impacted your small business. Let us know by filling out our brief survey here.