In the US, entrepreneurship and opportunity go hand in hand. Not only do entrepreneurs get to be their own bosses, but they also create jobs for others. And there are countless stories of people who arrived on these shores with very little, only to acquire their own piece of the American dream by opening their own small businesses.

Of course, every corporate giant started out small, whether it was as three tech aficionados in a garage (Apple) or a farmer turned five-and-dime store owner (Walmart). But SMBs don’t have to become huge enterprises to make an impact. On the contrary, according to the US Small Business Administration Office of Advocacy, SMBs account for 99.9% of US businesses and 33.4% of exports and are responsible for many millions of jobs.

Still, smaller companies face a challenge when it comes to competing with enterprises for candidates. Not only is it hard for SMBs to pay more for top talent, but their hiring managers are more likely to be wearing several hats, which can translate to less time and fewer resources to dedicate to attracting the right candidate.

Small may be beautiful, but it isn’t easy. We surveyed 1,000 small business owners in the US to find out about their biggest concerns in 2018 and how they’re addressing them. Here’s what we found.

56% of small businesses find it somewhat or very difficult to find the right employee for their business.

More than half of SMBs find it tough to find the right employee

Let’s start with some good news: small business owners are seeing their businesses grow. Of all the respondents, 51% hired new team members last year, and more than one third (36%) expect to experience growth within the next twelve months.

But the majority of companies are also coming up against challenges in the face of this promising growth. As the labor market tightens, more than half (56%) of survey respondents report finding it somewhat difficult (39%) or very difficult (17%) to find the right employee for their businesses.

This isn’t a trend that’s showing any signs of easing up: 35% of respondents say it’s as difficult to find employees now as it was five years ago. And nearly a quarter (24%) say it’s even harder than it was a half a decade ago.

24% of small businesses say it is harder to attract talent than it was five years ago.

Only 17% of SMBs believe they have the advantage when it comes to attracting tech talent

It’s little wonder, then, that many SMB owners believe big companies have a leg up.

Which types of professionals do they find most challenging to hire? Job seekers with tech expertise seem to be the most difficult to find, with only 17% of owners stating that they believe SMBs are more attractive to tech professionals. Similarly, just 18% of respondents said the same about HR professionals, and 19% felt that way about marketing professionals.

That said, 36% of owners say they don’t believe there’s a difference or are unsure whether larger companies are more attractive to tech professionals. And while there are other SMB optimists, the majority believe enterprises have the advantage across all types of roles.  

It’s tough to compete when it comes to salary, benefits and opportunities for growth.

56% of SMBs struggle to find candidates with leadership skills

Hiring for advanced skills also proves challenging. For instance, more than half (56%) of small business owners say it’s very (18%) or somewhat (38%) difficult to find candidates with leadership skills.

Critical thinking skills are also hard to find (55% of owners report difficulty), as are problem solving skills (51%).

But there is good news. Not only are skills like communication and teamwork easier to hire for, but when it comes to finding candidates with the right certifications and education, the majority of respondents (54%) say it’s either not that difficult (33%) or not difficult at all (22%).

For job seekers, the implications are clear: if you have these hard-to-find skills, highlighting them on your application can help you stand out to employers.

Employers, on the other hand, should be extremely clear about the skills they’re looking for. If leadership, critical thinking and problem solving are key to what you want in a candidate, clearly state this in the job title and description.

Great talent may also be found in unexpected places, so focus on finding candidates with core competencies and transferable skills. While these candidates might lack specific experience in your field, they have the skills to adapt to the new role and bring fresh ideas to the table.

37% of SMBs compete by offering higher salaries

So small businesses face challenges, but overcoming them is part of what makes being an entrepreneur so rewarding. So what are SMBs doing to compete with the big guys?

Well, even though it’s hard to challenge big businesses when it comes to money, 37% of small business owners are doing just that by offering higher wages.

But salary is only one way that SMBs are competing: 21% are emphasizing the ability to move around or advance within their organizations, while 18% are touting generous vacation policies.

That last point is one way to stand apart. Offering more paid time off, or even an open PTO policy, can give SMBs an edge over their larger counterparts. And it could be an effective tactic, as only 1 to 2% of companies are offering this benefit.  

Small businesses have another advantage in their arsenal: their size. It’s not easy to build a sense of community at work, but many job seekers today look for authentic human connections.

A smaller business often results in a tighter-knit group of people, and just as the owners wear many hats, so too do the employees. This gives them the opportunity to work on projects that might fall outside their typical scope of work, allowing them to cultivate a variety of skills.

Graph featuring how small businesses find talent.
This graph features the most common ways small businesses find talent, according to Indeed/Censuswide data. Over half of small businesses, or 57%, find talent through "word of mouth/recommendations," and 31% find talent through a "social media ad." "Online job board" is another method, with 28% of small businesses citing this as the way they find talent, followed by "Newspaper ad" at 12%. Only 9% of small businesses find talent through a "sign in the window."

SMBs still rely heavily on word of mouth—but it could limit access to talent

In such a competitive environment, how are small businesses successfully finding new hires? Word of mouth is the clear leader, with 57% of small businesses reporting that they find talent using this method.

Social media ads are the second most common recruiting method, used by 31% of survey respondents, followed by online job board placement (28%). Newspaper ads have not yet gone the way of the dodo, and signs in the window are still around, as these methods are used by 12% and 9% of respondents, respectively.

While these traditional recruiting methods are important, businesses that rely too much on one of them—say, word of mouth, for example—may be selling themselves short by focusing their efforts on a smaller talent pool. Not only does a small talent pool limit the number of candidates a business sees, but it can mean hiring too many like-minded people, which can reinforce groupthink and cut off new ideas before they have the chance to emerge.

In particular, with the majority of job searches today taking place on mobile devices, optimizing your listings for the mobile experience is also an essential step.

Another reason to expand beyond traditional recruiting methods is that much of the decision-making process is directly related to what job seekers can find online. Today, company reviews influence where job seekers apply, and a company’s reputation significantly impacts their final decision to accept a job offer. Establishing an online presence is key to attracting talent; creating a company page to engage potential candidates and enhance your employer brand can help.

And these are just a few of the strategies SMB owners can try. For while they will always face fierce competition, what sets successful entrepreneurs apart is their willingness to take on tough challenges and win. Indeed, this is part of what makes running a small business so rewarding.


In April 2018, an online survey was conducted among 1,000 randomly selected small business owners in the United States who are Censuswide panelists. The margin of error is +/- 3.1%, 19 times out of 20. The data was collected from a sample of business owners in the US with 1-249 employees.