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Survey shows workforce shortages, inflation, supply chain disruptions plaguing small businesses

January 19, 2022

Small businesses offering higher wages to attract workers

LANSING – Michigan’s small businesses continue to struggle with workforce shortages, inflation and supply chain disruptions, according to a new survey released today by the Small Business Association of Michigan.

“Small business owners continue to face one obstacle after another, nearly two years after the onset of the pandemic,” said SBAM President and CEO Brian Calley. “After dealing with closures and restrictions, there is a new set of significant challenges small business owners face. Workforce shortages, inflation and supply chain disruptions are prevalent issues that have the ability to jeopardize their success.” 

Survey respondents overwhelmingly identified workforce shortages (56%), inflation (56%) and supply chain disruptions (59%) as the biggest problems facing their businesses. Sixty-six percent of small businesses said it’s harder to find and keep staff. To combat that challenge, 70 percent of businesses are increasing wages to attract and maintain employees.

The survey, conducted January 10-17, of 600 Michigan small businesses, also revealed that:

  • 35% of small businesses have experienced a decrease in their workforce size, with 12% seeing a decrease of more than 20%.
  • 75% of small businesses have seen the cost of compensation increase in the past year.
  • 67% of small businesses have social distancing protocols in place for employees.
  • 87% of small businesses are experiencing higher costs than before the pandemic, including 43% that report costs are substantially higher. 
  • 14% of small businesses are still feeling pessimistic about the long-term survival of their business, slightly down from 16% in September 2021. 
  • 33% of small businesses have flexible hybrid systems in place allowing for a mixture of remote and in-person work.

SBAM has been conducting quarterly surveys of our members since the beginning of the pandemic. We’ve highlighted some questions to look for potential trends and other comparisons. You can view these questions and results here. These comparison slides cover data on workforce, compensation, COVID impact and more.

The Small Business Association of Michigan focuses solely on serving the needs of Michigan’s small business community through advocacy, collaboration and buying power. Today they serve over 28,000 members in all 83 counties of Michigan. SBAM is located in Lansing, just one block from the Capitol.

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