Michigan small businesses are struggling in the current economy to a greater degree than their counterparts in many other states. That’s the conclusion in a US Census Bureau study, released today by Kinexus Group, which focuses on job development and training in the region.
Here is what Kinexus concluded:
Small business hiring in Michigan is lagging the rest of the country, and more of them are closing their doors compared to their peers according to a survey from the U.S. Census Bureau. According to data from the Census Bureau’s “Weekly Small Business Pulse Survey” Michigan companies in manufacturing and hospitality are having significantly more difficulty in hiring workers – while the state’s health care and retail establishments are faring better. Overall, Michigan firms are struggling to hire workers and more of them are closing their doors compared to the rest of the United States.
“Unfortunately, the data is catching up to what we have been seeing and hearing from employers – small firms are having significant challenges,” said Kinexus President and CEO of Kinexus Group, Todd Gustafson. “There is no single reason for this, part of it is demographic, with Michigan getting older, the population not growing as rapidly, and our educational attainment levels are behind other states,” he explained.
The Census data from the week of October 10 revealed the following:
- Nearly 60% of Michigan manufacturers reported hiring difficulties– more than 5.8 higher than the U.S. average
- 84% of hospitality establishments in Michigan reported having hiring difficulties – nearly 18% higher than the U.S. average
- Health care and retail fared better than counterparts in the rest of the country, but still report labor shortages
- Michigan businesses were five points higher overall than the U.S. average – and an average of 6.4%
Michigan has also seen a greater share of permanent business closures than the national average. According to the study, 3.1% of Michigan businesses were permanently closed across all sectors for the week ending October 10th. This is up from 1.8% a year ago and is more than double the national average of 1.2% in the same survey week.
“I’m beginning to grow concerned the labor issues we’ve been seeing and highlighting are becoming structural – meaning they aren’t transitory and will bounce back to pre-Covid. Rather they may be enduring and a reflection of a new post Covid labor market that is vastly different,” said Gustafson. “The shift from 9-5 in the office work is underway. Competitive compensation and benefits alone will likely not be enough to attract workers. Employers with an appealing purpose, and inviting culture with workplace flexibility, work from anywhere, anytime is here to stay. The war for talent may have been won – by job seekers or so I hear anecdotally more frequently from employers.”
When asked what advice he would give to employers, he stated, “a key for all of us during this time is flexibility. Employers will have to continue to be creative, government policy needs to encourage innovation and flexibility in how programs are delivered, and we have to make sure education and training is aligned with employment opportunities,” he said. “That work is ongoing and takes on an even greater significance for small businesses, who drive our regional economy,” he added.
