Report: The Biggest Challenges Facing Small Business Owners Here's how one Canadian entrepreneur is overcoming them.

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Small businesses are a major force in the Canadian economy They account for 98% of businesses and they employ over 70% of the total private labour force. Despite their contributions, small businesses face unique challenges – many of which involve finding the right talent to grow their business.

Small businesses must navigate around particular obstacles when it comes to recruiting. Indeed recently partnered with Andréanne Marquis, owner and president of Womance, to get a unique perspective on how to hire top talent in small businesses. According to Marquis, "One of the biggest challenges I face is finding the right people for my business. I'm not only a small business owner handling the day-to-day operations of my company, but a hiring manager as well. At first, I didn't know anything about human resources or even the best practices when it comes to hiring, so I needed to learn how to find qualified candidates effectively, without a dedicated HR staff."

They're also competing for talent against large companies with deeper pockets who are more likely to offer higher salaries and benefit from a strong employer brand. In a job seeker's market, great candidates have plenty of good options. In order to attract top talent, small businesses must get creative to out-shine their bigger counterparts.

So, what are the biggest challenges facing small businesses in Canada? For the second year in a row, Indeed surveyed 1,000 small businesses in Canada to pinpoint some of the biggest recruiting pain points. Let's take a look at the results.

60% of small business owners say it's difficult to find the right employee

Although 34% of small businesses planning to hire new employees over the next year, 61% plan on keeping their company the same size. Those preparing to hire are anticipating challenges, with 60% saying that it's difficult to find the right employee, up 4% since our survey last year.

While there are more tools at their disposal now than ever before, small businesses are still experiencing difficulty in finding talent. In fact, 40% of respondents note that it's just as difficult to hire now as it was 5 years ago, with 29% saying it's even harder.

What do they find to be the hardest part about hiring? 57% of respondents say it's finding good people with the right skills. But, it's not just about finding good talent, it's also a matter of retention: 30% of small business owners say that retaining good people with the right skills is the most difficult part of the hiring process.

Candidates with certain soft skills are harder to find, with 62% of respondents saying that it's most difficult to find candidates or potential hires with critical thinking skills for their small business. This is followed by leadership skills (61%) and problem solving skills (59%). "For me, the main quality I look for in candidates is passion and motivation. As a small company, I need people who are willing to do whatever it takes to help the business succeed. The team needs to be willing to wear many hats and learn different aspects of the business – even if it falls outside of their traditional scope of work," says Andréanne.

Small companies think bigger companies have the edge on recruiting top talent

In today's low employment environment, many companies – big and small – have trouble attracting candidates. However, as a recent post by Indeed Economist Brendon Bernard illustrates, the smaller the company, the more challenging it can become.

Small business owners believe that large companies are more attractive to job seekers, especially those with highly specialized skills. Only 15% of respondents think that small companies are more attractive to tech professionals. Moreover, just 11% of respondents say HR professionals are more attracted to small companies, and only 17% believe marketing professionals are attracted to small companies.

Despite the huge competition for talent, small companies aren't going down without a fight. Small businesses are enhancing their perks in order to attract and retain workers. The main perk they're offering is flexibility – 54% of small business owners offer this as a way to stand out. This is a strategic approach given that, in another study, 40% of job seekers said that flexible hours is the most attractive factor when considering a new job.**

"It is really important for me to give this flexibility to the staff. This gives them more autonomy and also allows them to establish a good relationship of trust," says Andréanne.

Flexibility is followed by higher compensation (33%), letting employees work remotely (20%), health benefits and parental leave (19%) and advancement opportunities (17%).

While larger companies might have an edge in some respect, remember: small businesses have many advantages, too. There are things that small businesses can bring to the table that larger companies cannot – employees can have a direct impact on the business, wear multiple hats that provide broader experience, and they have more autonomy to offer unique perks (for example, bring your dog to work day).

59% of small business owners say they find new hires via word of mouth

Personal recommendations are helpful when looking for new hires, and small businesses rely on this method heavily – likely to avoid a strenuous hiring process. So much so, that 59% say they find new hires via word of mouth and asking for personal recommendations. Only 37% say they place an ad with an online job search site, and 32% say they post an ad on social media.

The problem with relying on word-of-mouth recommendations is that you might be limiting your candidate pool. Instead, small businesses should focus their efforts on promoting their open roles where the majority of people are looking for them – on job sites. While traditional hiring methods are a great way to supplement your recruiting efforts, small businesses shouldn't rely solely on these techniques. It's also important for job postings to be available via mobile – in Canada, 60% of searches take place on smartphones. Moreover, employers who accept mobile applications receive four times the amount of applicants.***

Hiring often causes some headaches for small businesses, but the growing pains are worth enduring to take your business to new heights. There are also ways to tackle these challenges head on. Marquis offers tips for hiring – and retaining – talent for your small business, despite big competition.

1. Offer flexibility as a perk: Flexibility is key at Womance. Employees have the ability to decide their schedules according to their needs and workload. We hire all of our employees, with the exception of customer service, on a part-time basis. This allows us to easily play with schedules and keep the team motivated, as they can work on various projects and reinforce their expertise. Flexibility is a great perk that I highlight early on in the hiring process as it has helped Womance attract and retain employees.

2. Build a collaborative workplace: Collaboration is very important for us as it helps to establish a sense of belonging to Womance. I always ask for the team's opinions on different trends and new purchases we want to make. I include employees in our business decisions because they know our consumers best. Giving employees the opportunity to share their opinions and help shape the company gives them a real sense of purpose, which helps boost happiness and therefore retention. As we like to say: We work with her, for her and for Womance.

3. Practice open communication and establish trust: Trust and communication are imperative to a company's success. Since the majority of the team are between 18 and 25 years old, it's very important for me to let them take initiatives, gain experience and grow their expertise. We must all feel accomplished, whether we are business owners, accountants, hairdressers or order fillers.

Every person plays a critical role in the company and no job is too small – which is true for many small companies. At Womance, even if employees are spending most of their time packaging, it remains one of the most important functions of the company. I tell new employees (and repeat it every week thereafter): "You have in your hands the most important part of this company. Work accordingly." Additionally, we tell them about all the good comments we receive – and the not-so-good ones, too. We share this with them so that they feel included and important, because they are. And what employee doesn't want to feel important?

Methodology:

The survey was conducted by Censuswide on behalf of Indeed among 1000 randomly selected respondents who are small business owners in Canada, between May 13, 2019 and May 24, 2019. The margin of error is +/- 3.1%, 19 times out of 20.

**CA Decipher/ Focus Vision Data on behalf of Indeed (2018), Canada
***Indeed data