“I don’t know if we’ll ever get back to normal:” Small businesses in Michigan trying to strike the right balance while the pandemic continues

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Sharon Jurgens said being a small business owner is about resilience and adaptation during the COVID-19 pandemic.

The chef and managing partner of Diamond Jim Brady’s in Novi is like many other small independent business owners in Michigan who are finding new and creative ways to adapt to unknown and unpredictable circumstances, especially when the Delta variant takes hold, cases increase and people are starting to worry again about their health and safety.

Juergens said small businesses continue to face several challenges that are different from earlier in the pandemic, including hiring and employee retention challenges. She also mentioned problems with the supply chain and higher wholesale food prices that are beyond the control of companies.

Sharon Juergens, cook and managing partner of Diamond Jim Brady’s Bistro in Novi, Michigan, will prepare ingredients on Wednesday, September 15, 2021 (Mark Cavitt / The Oakland Press)

“The unknown is the biggest problem for me,” she said. “I mean, there is only a certain amount of stress. We don’t know if the pandemic is returning and if there will be more closings. Recruiting is an issue for the entire industry. I see it as a long-term problem. It’s still super challenging. It’s just not that normal. I don’t know if we’ll ever get back to normal. “

The state’s leisure and hospitality sector recovered very slowly in July, with 391,200 employees across the state, still less than in July 2019, when the number was 460,900.

To attract more workers, she raised wages like many other small businesses, but was fortunate to lose only one employee in the kitchen who moved on to another job with promotion. She used most of the US $ 100,000 grant to pay salaries and overheads.

Compared to March 2020, wages in March 2021 for companies in Michigan with fewer than 100 employees were an average of 6.5% higher, according to the BLS data. Employment in companies with 10-99 employees decreased by 5.4%.

For a kitchen staff of their size, the loss of an employee was “disadvantageous”. In addition to higher wages, it is also closed on Sundays and Mondays and on certain public holidays in order to improve the quality of life of its employees and to give them more time to spend with their families.

For some restaurants, reducing opening times was another way to cut costs and make money in the face of rising food prices, especially meat.

“We also learned that quality of life matters a lot,” she said. “People always talk about wages as the only problem, but I think the restaurant business is a huge drag on the quality of your life. I think a lot of people learned during the pandemic that they didn’t want to give up these things and I think they saw the value of that reward. “

Chefs working at Diamond Jim Brady’s Bistro in Novi, Michigan on Wednesday, September 15, 2021 (Mark Cavitt / The Oakland Press)

In Oakland County, the challenge for small businesses continues to be improving talent retention and attraction.

Jennifer Llewellyn, the county’s human resource development manager, said the county’s economic recovery will sound differently depending on the business owner.

“We’ve spoken to so many companies, big and small, and the offer is just absolutely extraordinary,” she said. “Some small businesses have said they have never had a better year. On the other hand, one restaurant owner said that if he does not get additional staff, he will have to close his doors. It depends on the industry.

Between January and March, the county’s total employment increased from 668,279 to 679,595, an increase of 1.6%. The number is still lower than 732,300 in March 2019 and 733,300 in March 2020.

Companies that have received government and government support while creating innovative and creative business models thrive, said Llewellyn, whose workforce, available talent, health and safety concerns, and costs hit companies hard.

“Those were pain points before the pandemic, but they were only painful for certain professions and certain industries,” she said. “Well, these are pain points for everyone, and because it hurts everyone, it’s a lot more of a talking point.”

In October, the Pontiac County will host a forum on the food service industry and how employers can get creative to find and retain talent to avoid costly staff turnover.

Across the country, hiring and retaining workers and rising product costs are the biggest challenges small business owners are currently facing as government-mandated pandemic restrictions have expired. It is now up to the individual business owners how to best manage this pandemic for themselves, their employees and their customers.

Employment is growing across all industries in Michigan, but still below pre-pandemic levels, according to data from the Bureau of Labor Statistics (BLS). In July 2021, the nationwide employment was 4,487,565 while the number of people in employment was 4,715,003. Both numbers are down 5.4% and 4.8%, respectively, compared to 2019.

Brian Calley, president of the Small Business Association of Michigan, said the shortage of available workforce across the state, rising costs, and supply chain disruptions continue to be the biggest challenges facing small businesses in the state.

He believes it is important for companies to prioritize and balance workforce and working hours to ensure they can continue to provide a high level of service during opening hours. He added that companies shouldn’t try to do too much with their employees that could lead to burnout.

“You can only ask so much of the workers,” he said. “Tensions are higher and customer service more demanding than in the past. There are fears of trying to thin your staff, even if they are ready, to ensure that companies don’t create an environment where there is a great incentive to find something simpler. “

The state’s activity rate, the percentage of Michigan’s population who are employed or actively seeking work, was 59% in July, up from 62% in July 2019. The problem does not remain the number of available jobs, which is 1.1 nationally Millions was in July, up from 713,700 available jobs in July 2019, but the slow influx of people entering the workforce and the number of people leaving them.

397,700 American workers quit their jobs in July, the highest since at least December 2000, the BLS said. The number of new hires nationwide was 666,700.

For someone overseeing a small business organization of 28,000 members, Calley describes the economic recovery as uneven, with some industries recovering better than others. He said it would be like that for a while longer.

Professional and business services, as well as the construction industry, have rebounded well, Calley said, but small retail, leisure and hospitality industries have not been so lucky with the number of jobs restored.

From July 2019 to July 2020, the state’s professional and business services lost 64,600 workers from 643,400 to 578,800. In July 2021, 621,800 workers were employed.

Michigan construction workers totaled 188,000 in July 2021, more than 2,000 from July 2019.

“The vertical line of business has a lot to do with the rate of recovery,” he said. “Manufacturing is really about the challenges of disrupting supply chain components. Hospitality is about making people feel comfortable enough to go out. These are challenges that are in many ways beyond the control of the business owners as the recovery process was much more difficult … There are some industries that have fully recovered and others that are not even around. “

Although the nationwide pandemic restrictions on capacity, hours of operation and masks have been lifted, which gives business owners the freedom to respond to the pandemic, it is these external challenges that are beyond their control that have been very frustrating for many business owners.

Industries that depend on direct personal contact for their success are struggling more than others and are surrounded by more uncertainty. This includes retail, dining, lodging, and entertainment that recently reopened and brought the last few employees back in person.

Justin Winslow, president and CEO of the Michigan Restaurant and Lodging Association (MRLA), said companies are trying to meet customer demand with 100,000 fewer workers before the pandemic as labor and product prices skyrocket. He added that these ongoing challenges are the same or more severe than in the early stages of the pandemic.

In August, almost two months after the nationwide COVID-19 restrictions were lifted, the MRLA released the results of a nationwide survey in the hospitality industry.

“Only 90% of full-service restaurant operators said they closed early in the day as a direct result of inadequate staffing to meet demand,” said Winslow. “Restaurants just can’t find workers, no matter how much they pay and whatever other incentives they offer to meet that demand. I think burnout is very real and that’s why you see reduced working hours. “

Although restaurants do what they can to survive in the short term, including raising wages to attract workers, shortening hours, and cutting the menu, these are not “long-term strategies for success”.

“When the restrictions went away, (restaurants) had to take advantage of that demand, so they paid people ridiculous amounts to make sure they weren’t sustained. Now that it’s through this peak midsummer, your overheads are beyond your revenue opportunities and you are in a dangerous place. “

The report also found that 9 out of 10 Michigan restaurants and almost every hotel are under staffed to meet consumer demand.

“Even for restaurants that are doing well on sales, what about the profit margin?” He said. “Because profitability was a real challenge. Even the most successful restaurants in terms of diners struggle with profitability. “

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