Is the Pandemic a New Era for Small Businesses?

As our working dynamics continue to evolve in the face of the pandemic, can it be a gift to small businesses? explores how and why! 

The COVID-19 pandemic proved to be a game-changer in the small business landscape. Small businesses today need to consider the ease in adopting remote working practices full-time today, especially given the benefits of having a remote workforce, cost-cutting, savings, and overall flexibility. 

According to a 2019 study conducted by Owl Labs, 83 percent of workers stated that they would prefer remote working. Many respondents added that they would also feel more trusted and be able to keep down stress levels as there would be greater room and freedom to strike an appropriate work-life balance. Over 57 percent of small business owners believe that remote work will resume even after the pandemic. Meanwhile, many big corporations have announced that they hope to resume in-person activities at work. 

Challenges faced by small businesses 

“When I ran a small business, one of the biggest challenges I faced was the ability to compete for talent with enterprise organizations. I wasn’t alone, either – it’s a common struggle for many small businesses. We cannot necessarily match the salaries and benefits offered by larger organizations. Other perks such as gym memberships, generous stock options, and top-tier health insurance are also very difficult to compete with,” says Carlos Hidalgo, a 25-year business veteran, in an article written by Elite Business Magazine.

This is not shocking considering that the gap between large and small companies is growing even though the digital revolution continues to benefit small companies today. 

The graph above shows how, since 1993, there has been a growing trend of larger companies acquiring a larger proportion of the labor market. From 1996, when US companies with less than 250 employees and companies with 250 employees or more had the same share of employment, the gap has gradually widened to the point where companies with 250 employees or more have a 55.1% share of the employment. 

The struggles shared by Mr. Hidalgo above demonstrate the many hardships smaller businesses can be facing with regards to competing for talent with big enterprises. Big enterprises have the economies of scale necessary to blow the smaller competition out of the water. Unlike smaller businesses, they are able to offer financial benefits, something smaller businesses are unable to do. Has the pandemic presented smaller businesses with an opportunity to gain an upper hand in terms of employment?

It’s the trust. Usually, relationships between employers and employees in smaller businesses tend to be more informal and closer, and there’s a level of trust which goes on to the work. This element of trust is why smaller businesses can take advantage of the return to the office. What do most small businesses have which most big enterprises don’t? Trust! “We trust you to work from home!”. And some will appreciate this sense of freedom more than financial benefits, but you will have to convey it through recruitment marketing.

Young people in the driver’s seat 

As young people begin to take the driver’s seat in the startup world today, they are bringing in a new era of creative and innovative thinking. New York Post reported that nearly one in three millennials said they had some type of small business, with 19 percent stating that it was their main source of income. 

“Technology has made it easier than ever for anyone with an idea to create a home for it online and find their audience,” said Melissa Schneider, global trends expert at GoDaddy. The affordability and accessibility of technology and tools today are most likely influencing this burgeoning entrepreneurial and business spirit among the youth today especially as one can launch and run a business at home. 

Sourcing global talent

As work from home might end up being the new norm in the post-pandemic world, apart from the greater flexibility brought on by remote working and the ability to source global talent, small businesses are able to attract talent from across the globe. “Working during the pandemic has opened opportunities for our company. Since we work remotely, we have been able to source the best talent from all over the world,” said Berkeley Pharma Tech, a biotechnology startup incubator interviewed by the HireBee team. 

HireBee is leveraging technology to help small businesses and startups source and tap into the best global talent. We are making it possible for businesses to build their capacity, especially with recruitment automation, recruitment marketing, and candidate relationship management. Our many recruitment solutions help small businesses stand out from the crowd in the labor market, and virtually turn them into talent-magnets.   

Collaboration and teamwork

Moreover, remote working is encouraging more collaboration than ever before simply because employees are able to stay better connected. “While there can be challenges to working remotely, our teams prioritize communication. We use weekly meetings to check-in on progress and discuss questions, concerns, and upcoming projects,” said Berkeley Pharma Tech. 

Another organization we spoke to said, “The Sustainable Living Guide has values and a culture that is relational, co-creative, and caring. With the pandemic, we experienced both the opportunity and the responsibility to step deeper into these values.”

Remote working is encouraging more collaboration than ever before simply because employees are able to stay better connected. 

Revamping for the future 

Small businesses are making adjustments to navigate the pandemic. Businesses are using contactless deliveries to make services available online, asking employees to upgrade and learn skills to reflect new business models, adopting new revenue streams, adopting new technology processes, among others. Businesses are also able to maintain different communication channels and styles owing to the advent of platforms like Slack, Trello, and Zoom. Business owners and start-ups also often measure performance and work in a qualitative and impact-based manner, giving greater freedom and time for employees. 

Overall, the pandemic is a defining moment for many starts-ups and businesses. As the pace of technology and the war for talent only continues, small businesses and the spirit of entrepreneurship will only thrive. In a post-pandemic world, the workplace and its dynamics will look very different, a challenge small businesses are ready to face.

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The War for Talent: Covid’s Touch

Masks, gloves, face shields, self-isolation, 70% ethanol solutions and a hurting economy. How has Covid-19 impacted the war for talent?

The war for talent is multivariable, a lot of events can cause its intensification and de-escalation, and considering the amount of chaos brought about by Covid, no economic or business management theory with a ceteris paribus slapped on to it can accurately attribute the effects of Covid on the war for talent. And, in a lot of ways, as countries seek to establish order out of the newborn chaos, such as the USA with the new president-elect Joe Biden’s slogan of “Build Back Better”, it can be anticipated that the same might occur with the global economy. In our previous article, we took a look at post-Covid employment, and expressed why we think that the trends of remote work and talent acquisition software might be here to stay. 

The War for Talent: De-escalating or Intensifying?

There is a belief that, because of the ongoing Covid recession, many employees have been made redundant due to reduced economic activity, and many businesses have shut down, and hence the war for talent has de-escalated since the shortage of talent will be reduced. In simpler economic terms, this belief translates to a decrease in labor demand, and an increase in labor supply, which supposedly cuts the shortage of talent. Additionally, due to global levels of trade and immigration being attributed as indicators for measuring globalization, the sharp decrease in both has led many to believe that globalization is taking a hit. 

So what does this mean? Is the war for talent de-escalating? Is globalization decreasing? Well, it’s more complicated than that…

The “common sense” belief of labor supply rising and labor demands decreasing may be true, but it may be misleading. Whilst this is universally and unequivocally true, one must consider the following factors. Firstly, in businesses which haven’t permanently shut down, downsizing has occurred in a manner with which workers who are not vital for future growth projects are made redundant. This means that much of the workforce which has gone out of work are not the organizational fits which businesses who wage war for talent are looking for. Much of this talent has stayed employed. Furthermore, even if you doubt this sentiment, since it is based on an assumption, and believe that this isn’t the case, this doesn’t mean the war for talent has de-escalated and here’s why.

Short-Term vs Long-Term and Other Nuances

Since these shifts in the labor market occurred are due to demand and supply-side shocks, due to the consequences of Covid, these changes do not represent trends in the labor market or set a precedent for the future of labor markets, as economies worldwide are set to recover from these economic shocks, and return to normalcy is perceived as inevitable in most societies. In fact, it can be argued that as a consequence of Covid, trends of digitization of the workspace, the increasing implementation of AI to automate and enhance processes and industry 4.0 are now going to accelerate. 

Now, we touched on the “Build Back Better” agenda of the Biden-Harris administration, and the entire point is, that these illusory or genuine decreases in talent shortages will be soon eliminated through long-term economic forces. So depending on how you view the situation, you either have no reason to believe that the talent on war has de-escalated, and that in fact it will intensify due to acceleration of mentioned trends, or you can view this turmoil in the labour market as a short window of opportunity to scramble for the talent made redundant.

Now, what about globalization? With globalization, the answer isn’t as clear-cut. Even before the Covid crisis, since The Great Recession, the deceleration of global trade was noticeable. However, it is to be noted that globalization is multi-dimensional, and cannot only be correlated with volumes of international trades of goods and immigration between countries, which have been hit hard during Covid. However, along with these negative indicators for globalization, there are positive indicators such as the aforementioned increasing digitization of the workspace. In a way, the digitization of the workspace has lowered the barriers to entry to foreign labor markets. Hence, SMEs are now more than ever poised to benefit from foreign labor markets and escape the war for talent brewing in their markets, and compete for global talent.

The Verdict

In conclusion, the war for talent isn’t de-escalating in the long-term, with short-term possible reduction of talent shortages to be corrected by long-term economic forces. Additionally, as Covid has incentivized companies to rethink their strategy, a lot of focus is to be put on automation and digital transformation, narrowing the pool of talent to hire from. But, for SMEs, the digitization of the workspace means sourcing candidates from across the globe, expanding the talent pool to hire from and de-escalating the war for talent. With barriers to entry to foreign labor markets being lowered, more SMEs are expected to be competing for talent with the big dogs. 

However exuberant this may sound for some, it is important for such operations to be conducted with the correct logistics, and, luckily, there are a plethora of software tools which companies can leverage to adopt remote working and maintain a sustainable global workforce. Most correlated with the topic of discussion of this article, talent acquisition software solutions are perfect for making global hires with efficiency. Much of the hiring processes are automated, and recruiting teams are empowered with an interface specialized for their hiring needs. For an experience catered towards post-Covid hiring needs, HireBee is the perfect solution, with the company placing an emphasis on Covid and developing their product accordingly, as the startup seeks to empower SMEs to compete for talent with big enterprises globally.

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Financial crisis due to the virus that caused the pandemic. 3D Rendering

Post-COVID Employment: Remote Work & Talent Acquisition

When discussing COVID-19, the immediate impacts of COVID-19 on the job market seem to be rather evident, but what about the long term impacts? The pandemic has been turbulent and uncontained at large for most countries, with the world economy estimated to have shrunk by 4.4% according to the IMF, with only 24 countries seeing an increase in Real GDP, of which only 14 saw an increase of more than 1% (China and Vietnam included). Travel restrictions, declines in global trade, quarantine and uncertainty have led to rises in unemployment, closing of businesses, demand shocks — with demands for different products and services changing suddenly and severely (temporary hoarding of sanitary products, increase of spending in the health sector and the sharp decrease in demand of non-essential products), and consequently supply shocks and the decrease of money velocity. In this article we will discuss why the trends of remote work and talent acquisition software might be here to stay.

Whilst unemployment figures improve as innovation and response to the pandemic mitigate its threat, there are long-term implications that should be considered. Innovation has been key for businesses during this pandemic, and oftentimes it has been involuntary, as certain systems had to adjust or disintegrate. And in these instances, it is mutually understood by all stakeholders that there is no other alternative, and that they will have to adopt certain practices, which will certainly see improvement as these systems see prevalent application from businesses from different sectors and geographies alike. And to a certain extent, practices which have been promoted by certain stakeholders in a business, but have been vetoed by other stakeholders not in favor of the practice, may be here to stay, as such practices may have demonstrated to bring substantial benefits to the businesses, creating a precedent for the practices to be favored and widely accepted. Remote working and talent acquisition software are these practices, having had significant driving force behind them pre-COVID for their many benefits; and you need to be prepared for these practices to shake up the new post-COVID job market.

The Trend of Remote Work Pre-COVID

Telework, or remote work or telecommuting, is defined by the U.S. Office of Personnel Management as “a work flexibility arrangement under which an employee performs the duties and responsibilities of such employee’s position, and other authorized activities, from an approved worksite other than the location from which the employee would otherwise work”. They also state that “this definition of telework includes what is generally referred to as remote work but does not include any part of work done while on official travel or mobile work”.

Remote work has been gradually growing over the years for multiple reasons. The benefits to realize are mutual for employers and employees, although it can be argued that the benefits it induces for employees are the primary driving force for the consistent increase in remote work, as statistics overwhelmingly suggest that a vast majority of the US labor force which work remotely prefer this model of work. Buffer conducted a study on 2500 remote workers, where they derived various intriguing statistics which can be used to comprehend the sentiments which remote workers hold for remote work, and it is definitely worth the read. Key statistics I would like to source are that 99% of the correspondents would like to work remotely, at least some of the time, for the rest of their careers and that 95% of the correspondents encourage others to work remotely. The participants of the study were also asked about the biggest benefit they realize from working remotely, where the main reasons, listed in order of popularity, were: flexibility (40%), working from any location (30%), time with family (14%) and working from home (13%). Other interesting statistics on remote work have been compiled and sourced by HubSpot.

Well, why is remote work beneficial for employers? For starters, the mere fact that remote work is beneficial for employees, makes remote work beneficial for employers. To elaborate, if remote work is more likely to keep certain employees content and happier with their occupation, it may result in higher morale, which may result in higher productivity and higher employee retention rates. Another key reason can be to cut costs. You can cut costs in two main ways. Firstly, there is less of a need for office spaces and utility supplies, hence the employer can cut costs on renting offices and utility payments. And secondly, remote work makes flexible working hours and freelance employment easier, more productive and more accessible, and creates opportunities for such employment which has the potential to cut overhead costs and allocate time and resources more efficiently.

Lastly, I would like to mention perhaps one of the most key benefits which can truly help transform the company. This benefit is expanding the pool of candidates for talent acquisition. Searching for candidates near your location explicitly can land you a very limited list of candidates, and might force you to make compromises on a hire which you view as suboptimal. For example, if a certain skill or profession is not popular in an area and the candidates for your hire hold severe leverage over negotiations, you can mitigate such compromises by hiring in a completely different location where the leverage is yours. For example, if one of your requirements for a job title is a significant level of proficiency in English, and your offices are located in a location where English is not well professed, you might need to look to other job markets to source a candidate.

An interesting thing to note is how much the employer’s benefit coincides with the employee’s. The flexibility of working hours is a benefit for both ends, as certain people want to adjust their occupation hours according to their lifestyle, and not the other way around, and employers might be looking to add flexibility in their employment to maximize efficiency; the employee’s benefit of finding work from any location coincides with the employer’s as he might be looking to other job markets which possess needed skills, and the employee might be looking at job markets where his skill is demanded; and employers might be looking to cut rental and utility supply expenses, whereas employees might be looking to cut transportation expenses. Although remote work seems to be the perfect mediator for employers and employees, the uncertainty and skepticism which may arise of productivity levels of remote staff, and challenges remote workers may face with the practice (included in the Buffer study) may end up halting telecommuting reaching the heights it has the potential to reach. But this is where COVID-19 comes in. COVID-19 disrupted the consistent, but gradual increase in remote working, by skyrocketing the phenomenon to new heights. Businesses which had a terrible time with the practice may end up discarding it, hurting the upwards trend, but businesses which successfully implemented the practice may end up adopting it outside of the circumstances born by the pandemic. But we have reasons to believe the latter is occurring more than the former.

The Amping of Remote Working during COVID-19

We have now established why remote working may be here to stay. With COVID-19 now disrupting gradual growth of remote working, locked by uncertainties and skepticism, the involuntary adoption of remote working as a means of sustaining business may now either purge employers of their skepticism, or vindicate them; which will either unchain the practice, making it become the new norm, or resume its gradual growth. 

Let us look at some interesting data which pinpoint the spike of remote working, and observe some other information which may hint which of the scenarios is most likely to play out.  

'Remote Work’ Search Trend Analytics on Google | Graph
Graph 1. ‘Remote Work’ Search Trend Analytics on Google

First, we have a graph exported from Google Trend Analytics, which shows the trend of searches for remote working from 2004 to December of 2020 (Graph 1). The Graph shows a gradual increase in remote working, and a major spike in the March of 2020, with COVI-19 reaching the western world, followed by a decrease in searches — yet having searches way higher than pre-COVID, followed by another spike in searches around November-December, during sudden increases in COVID-19 cases for North America and Europe.

Percent of employed people who teleworked at some point in the last 4 weeks because of the COVID-19 pandemic. Source: US Bureau of Labor Statistics | Graph
Graph 2. Percent of employed people who teleworked at some point in the last 4 weeks because of the COVID-19 pandemic. Source: US Bureau of Labor Statistics

Then, we have a chart which shows the share of the labor force working remotely in May, June, July and August, in which we see the share decreasing, as expected after the spike from the outbreak. This data can be compared to pre-pandemic data, where, according to Flexjobs, in mid-February of 2020, 3.4% of the workforce worked from home, whereas a quarter of the workforce teleworked in August of 2020.

According to Gallup, as of September, 35% of workers want to continue working remotely because of preference, 35% want to return to working in office and 30% want to work remotely because of COVID concerns. 

With major companies like Twitter and Facebook announcing that they will continue employing workers remotely, and concerns about workforce productivity depletion being alleviated for some, remote working seems like it is here to stay.

Talent Acquisition Software

Talent Acquisition Software is a solution which complements the increasing presence of remote working. The talent acquisition market is one which has consistently grown over the years, with innovation and competition constantly increasing the standards of the industry and improving user experience. With remote working, there is often not much of a need hiring locally, and conversely, you can hire from specific locations outside of your region. Through hiring only near the location of your offices for remote work you often limit the size of your candidate pool for a job that can be done from the other side of the world, and you may also be restricting yourself financially by paying high salaries for these jobs if the area of your offices has high price levels. With talent acquisition software, you can integrate with multiple online job boards and hire from anywhere in the world. This software, often called Applicant Tracking Systems (ATS), allows you to manage your entire recruitment process within one platform, with the software providing the recruiter with multiple recruitment solutions, such as: data storage for candidates and resumes; features for process creation, such as workflows, email templates and requisitions; candidate communication throughout the process; reports and analytics; filtering, sorting, searching through candidates and features to make candidate management easier; team collaboration; additional practices to enhance recruitment, such as interview scheduling, surveys, referrals, testing and assessment, and employer branding; job posting; and stored feedback, notes and interview scorecards. Logo

If you’re looking for a post-COVID solution to recruitment, and want to keep up with your competitors in this new job market, you need to use HireBee. HireBee is a talent acquisition and candidate relationship management software. It is a startup founded in 2019, that has put direct emphasis on hiring in the post-COVID world. HireBee is going global and helping employers connect with candidates from all parts of the world. Its modernity means that the platform is going to develop accordingly with the effects of COVID-19, with feature requests and suggestions from customers always being discussed and evaluated between the HireBee team, and ways of implementation innovated. Other Applicant Tracking Systems which have built a name for themselves and developed a large customer base pre-COVID will not have their product catered towards post-COVID solution from the ground up. The future of recruitment is here, start a free trial now to get a taste of that future.

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