Small business employee retention rates in the city of Atlanta highest among ten large cities nationwide, according to a Bank of America report. TERRY HAGERTY/ FOR BASTROP ADVERTISER NOV. 25, 2017

Small businesses face challenges retaining and hiring workers

Pete Marte’s solar installation and maintenance business started the year with a staff of 99. But, as 2018 draws to a close, that number has shrunk to 80.

The company, Hannah Solar, underwent restructuring, which led to some of the decrease in staff. Another reason for the Atlanta company’s drop in employees? Poaching by competitors.

With the unemployment rate at a 50-year low, employee retention in this ultra competitive job market is likely to continue being an issue for Hannah Solar and other small businesses across the nation in 2019, according to the recently released Bank of America Small Business Owner Report. And that could be a problem, because more than half of business owners said that they had difficulty finding qualified candidates for job openings in 2018, in some cases hampering growth.

Overall, the report’s outlook for small businesses was positive: Four in five entrepreneurs anticipate year-over-year revenue growth, and many say they plan to expand. But, while small business hiring is at its highest level in three years, the tight labor market presents a challenge in employee retention and hiring.

Hannah Solar lost several highly experienced employees to a competitor this year, said Marte, the company’s owner.

“They were great people. I hated to lose them,” he said.

Compared to 10 other major metropolitan cities, Atlanta’s small businesses had the lowest turnover rate, with only 21 percent reporting losing an employee in the past year, the Bank of American report said, while Washington, D.C. had the highest, with 34 percent losing at least one worker.

Dean Bird, Atlanta small business bank manager for Bank of America, attributes the high retention rates in Atlanta to job perks, flexible schedules and opportunities for professional development.

For businesses to survive the tight labor market, they have to modify their hiring strategies and respond to what employees need, said Rajeev Dhawan, director of the economic forecasting center at Georgia State University.

“If you want the workforce, you have to provide the environment,” he said. That means providing incentives and competitive pay to stay ahead ahead of competition.

“If you need tech workers, then you have to be in a part of town that has the kinds of amenities which seem to be in Midtown, old Fourth Ward and Buckhead,” said Dhawan. “If you are in traditional (professions), then it’s OK to be outside the perimeter because your workforce is different.”

To land — and keep — the employees they want, many small business owners are highlighting the benefits of their work cultures.

Marte has instituted pay raises and flexible schedules to encourage his employees to stay put.

He hopes those incentives will help him grow his staff to 100 by the end of 2019.

Terri Denison, the Georgia district director of the U.S. Small Business Administration, said business owners could expand their hiring options by making sure to include people with disabilities, those returning to the workforce after deployment and those re-entering the labor market after incarceration.

For Aaron Brown, the owner of Town Center Music, employee retention is a major concern.

The retail industry typically has a high attrition rate, due to low wages and high competition. But, because he sells musical instruments and offers music lessons, his business is all about building trust with current and potential customers, he said. Losing employees who have developed working relations with clients could adversely affect sales and the rate of return for music students.

“It’s always an issue for us,” said Brown.

“If we can find that person who can create the environment of trust with those soft (sales) skills, and then back it up with knowledge and passion for what it is we are selling, then that’s really the ideal employee for us. And they are really hard to find,” he said.

Brown has not lost any of his workers in the last 18 months. He attributes that to offering great health benefits, employee discounts and flexible work times.

Sean Casey, too, is focused on creating a great work environment.

He owns Rotorcorp, a helicopter parts business in Atlanta, and he said it’s rare for him to lose an employee. That’s because he offers great benefit packages and a family-oriented company culture, he said, giving him an edge on the competition.

“I need to work here, too, so I want it to be a fun place,” he said. “We are a small company. We don’t have a big catalog of benefits like a Fortune 500 company might, but we offer a lot of flexibility. That flexibility can be invaluable.”

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