While small businesses leaders are reportedly less optimistic about their success according to the new Wells Fargo/Gallup Small Business Index, leadership training programs are allowing leaders to learn valuable leadership skills that help them to improve their management success. This is important since small business confidence has fallen since 2014.
The small business owners that were interviewed for the survey were less optimistic in terms of their financial situations than they were at the end of 2014 and the beginning of 2015. The drop in the Index score, down to 64 compared to the reported 71 in January, is the first notable decrease since the November 2012 Index.
Lower revenues and a slight drop in credit expectations were two factors that led to the current drop in optimism. Participants of the April survey reported fewer cases of revenue increases, with 42 percent reporting an increase as compared to 49 percent from the January survey. While this number has dropped this quarter, the results are still higher than they were a year ago, when only 36 percent of respondents reported an increase. In terms of access to credit, 25 percent of participants reported that it was very or somewhat difficult to obtain credit, which is up from the reported 20 percent in January.
Hiring trends and plans to add new employees were another topic addressed on the April survey, and only 16 percent of respondents reported that they added positions to the organization within the last 12 months. Some reported challenges to their hiring trends include:
- An over- or under-qualified applicant pool (40 percent)
- Lack of time and resources to devote to hiring (33 percent)
- Unable to compete with benefits and salaries offered from larger companies (68 percent)
- Unable to afford and offer desirable benefits (57 percent)
- Unable to offer full time positions (48 percent)
- Unable to offer telecommuting or flexible schedules (45 percent)
- Unable to provide technology such as laptops, tablets or smartphones to their employees (40 percent)
However, small business owners who are partnering with training programs for employees are finding that access to training is readily available. Those training programs that offer multiple ways to learn information serve to reinforce training transference and are helping small business owners to shore up their work culture and onboarding process.
While these challenges may be an important component to the lowered optimism, the real problem may be more complex and important. Many small businesses lack a strategy that goes beyond simply providing enough money for the owners while offering poor benefit packages to their employees. Rather than following traditional business practices, small business owners should be taking advantage of the current technologies that simplify operations and open the applicant pool. One way to accomplish this is by hiring contractors to perform key functions who can work for many different employers on different projects. Linking business success to hourly wages and sometimes a salary, is also part of the problem. Small business owners who educate themselves on the different available options, such as gain sharing or profit sharing, and who are transparent with their operating expenses can show employees what income requirements are required to improve benefits. This puts opportunity into the hands of employees who would rather work for a small business than large corporate enterprises.
Key components that affect a small business’ bottom-line include:
- Income and expenses (operational costs)
- Owner’s profit
- Employee salaries and benefits
- Profit sharing (showing employees how their services and sacrifices contribute to profit and creating a bonus package based on exceeding current profit margins)
- Arbitrary time off
- Strategic planning (including action planning and deployment steps that include employees)
- Employee training
All of these components are going to affect the overall profits that a business enjoys, so it is important for owners and managers to understand how they personally affect these areas. With proper training programs that take into consider how people learn and retain information, leaders can learn to train their employees on specific team management and maintenance skills that include problem-solving, decision-making, communication, conflict resolution and more.
But coordination with the business owner is also important, as employees need the opportunity to practice their skills on the job in a way that ensures transference of the training. The membership training offered by TIGERS delivers a training component that adds weekly pushes of information for a period of time so that trainees are able to integrate their new skills.