Staffing shortages causing sales losses for Virginia small businesses


Small businesses in Virginia and other parts of the country have faced staffing shortages in recent months, which are now causing losses in sales, according to a report from the National Federation of Independent Business.

After the commonwealth's COVID-19 restrictions were eased and mostly eliminated, small businesses struggled to fill open positions they needed to keep up with an increased demand for services. The continued shortage has caused a disruption in businesses providing services and a disruption in the supply chain, which is negatively affecting sales, according to the NFIB.

The NFIB, which is the largest small business association in the country, surveyed its members nationwide about the staffing shortage. It found that 22% of businesses owners who responded are experiencing significant staffing shortages and another 18% are experiencing moderate staffing shortages. Nearly half of respondents are receiving fewer job applications than one month ago and about 39% have stayed flat.

Of the employers who are suffering from staffing shortages, 19% have reported significant losses in sales opportunities and 30% have reported a moderate loss of sales opportunities.

About 30% of business owners who responded reported they needed to adjust their hours and nearly one-third of businesses reported the disruption in the supply chain has a significant impact on their business. More than half said the supply chain disruption is worse than it was three months ago.

About 12% of businesses responded they could only operate in the current economic climate for another six months or less and another 15% said they could only continue for between seven and 12 months.

Twelve percent reported they will only be able to continue business operations for six months or less under current economic conditions and another 15% for 7-12 months.

The national trends have been similar to what Virginia businesses are reporting, NFIB Virginia Director Nicole Riley told The Center Square. Businesses have been forced to reduce operating hours, which causes them to miss out on sales, and some have lost sales because of supply chain shortages, such as the crab shortage.

Riley said the economy was starting to improve when the pandemic restrictions were eased, but that staffing shortages are slowing down the recovery.

Unemployed Virginians still receive an additional $300 per week in pandemic unemployment benefits, which Riley said is incentivizing people to stay home, rather than work. Although Gov. Ralph Northam introduced a return-to-work bonus for certain small businesses, Riley said she has not gotten feedback from businesses that this program even made a dent in staffing shortages.

Northam’s Return to Earn Grant Program provides bonuses up to $500 for certain workers if the bonus is matched by the employer. However, the bonus is only available for jobs that pay at least $15 per hour, which Riley said rules out a lot of struggling businesses.

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