Small Businesses are our Economy

Small Businesses are also the Unsung Heroes of the American Workforce

– by Danny Patterson


May is Small Business Month. It’s time to salute all the small businesses across America. I am in constant awe of their vision, courage, resiliency, and commitment to their dreams. Small businesses are our economy. They are the backbone and heartbeat of America. As a workforce system, we need to keep the vitality and diversity of our local economies alive through our positive actions toward local small businesses. So, with all those accolades, one can only wonder why they are not a top priority of Workforce Development Boards (WDBs) across the country.

The obvious question is, why should small businesses matter to your WDB? Did you know that companies with less than 50 employees:

    • They are not required to file WARN Notices, so WDBs will not know about planned layoffs or closures.
    • Not likely to have HR departments, so they are more likely to need your services.
    • May be hiring but not posting on job boards, so WDBs will miss employment opportunities for job seekers if they are not working with them as partners.

Small businesses are cute mom-and-pop shops, and we feel good about supporting them. But WDBs must remove that preconception and recognize small businesses are not only contributing to our communities; they are driving it. That’s right! They are the driving force.


There’s nothing ‘small’ about small businesses.


One common misconception is small businesses are small, but there is nothing small about small businesses. Small is only a  designation of size, not their impact on America’s economy. One of the surprising takeaways from the recent NAWB Forum was the lack of focus on small businesses.

Did you know 98% of all companies in America have less than 50 employees? And these businesses employ more than 50% of all workers? Even more interesting is that 75% of most sectors are small businesses. When you see those stats, I’m guessing your reaction was the same as mine – no way!

Small businesses are companies with less than 50 employees and represent: 

Small businesses are our economy

Surprising and impressive, right? Now, think about their positive contribution and impact on the workforce, the community, and the overall economy. Without small businesses, we would be half of what we are today.


Up against all odds 


Small businesses juggle multiple priorities every day – having enough working capital to keep the doors open, finding new customers, growing their business, and hiring qualified job seekers. But now, they are up against some trends entirely outside of their control. The impact of COVID has had a long tail. The great resignation/reshuffle has created a labor shortage. Inflation and fears of a recession are worrisome. And on top of all that, they are invisible to the workforce boards. We know this because we had to work hard to find them and then provide economic relief grants to these same struggling businesses. Let me ask you, what have you done with them since? How have these relief grants impacted them? We should know! We are investors and partners with them.


Shifting dynamics – The retail WARN notices in 2020 for temporary layoffs weren’t temporary. Small businesses with more than 50 employees now employ less than 50. Moreover, the retail shops in the 10-50s segment have now shifted into the less than ten employees bracket. These shifting dynamics are not limited to the retail industry. Small businesses have gotten smaller. We see this too in our communities. As the economy is opening up, some small companies have posted signs such as: please be patient – we’re currently understaffed. As a customer, I thank the people working in these shops for showing up. Yes, I will be patient. And thank you for being here.


Underserved training needs – With the current labor shortage, companies need to scale up with the trades. We all understand that need. I see infrastructure projects that seem unending because of the labor shortage. For years, there has been an ongoing national conversation around this challenge, which continues today with the focus on increasing apprenticeships. But in many cases, those are reserved for large companies and union shops. While there are some successful new models, small businesses don’t have ready access to apprenticeships – and others may not have the bandwidth to provide the ongoing training and administration to support these training models. There is also the continued discussion regarding the connection between education with employment. But is that connection lost on small businesses? We need training programs linked to the jobs in your jurisdiction – to meet the needs for a skilled workforce in the economy (hint: that’s small businesses).

Do you have the proper training programs for small businesses in your community? We have heard the term, reimagine workforce! What would happen if you reimagine your strategy to support small, minority, disadvantaged and disabled veteran businesses as a critical element of our strategy? Imagine that!


No seat at the table – Small businesses are also not as involved in the conversations with education organizations about the skill sets they need. For example, in Los Angeles, small companies with less than 50 employees in Health Care are driving the growth in that growing sector. As you develop these sector strategies, ask yourself who is sitting at your table and why? Are the small businesses driving the growth in your area included? WDBs make daily decisions that impact small businesses by developing training programs, sector strategies, and competitive grants. As stated above, they make up 50% of employment, so who is at your table? Let’s invite them to the table, and ensure your WDB represents your community and your initiatives include small businesses.


Financial stability is not stable – Healthy companies are critical for measuring the success of our efforts to support job seekers. The three standard measures – placement, wages, and retention – rely on healthy companies. Do you know the health of the businesses (large and small) in your community? Do you know who is expanding? Who is stable? Who is contracting? That’s an essential aspect of targeting small businesses. WDBs can support small businesses across the entire business cycle – from growing and hiring to stable and considering a potential expansion. The other side of the strategy is to work with struggling business that wants to stay afloat and would benefit from early intervention from this system to help them avert layoffs. WDBs: Become the unsung hero in your community – and focus on small businesses!


What do small businesses need most besides customers? The support of their local Workforce Development Board.


I understand why WDBs are attracted to Amazon, Walmart, large manufacturers, and the like – they’re big, and they employ and churn through many people. Almost half of everyone employed is in these companies. That certainly makes their job much more manageable. But small businesses are the heartbeat of America, defy the odds every day, and employ the other half, so who is helping them get the qualified workforce or services they need?

My ask to WDBs is to ask not what you can do for the larger organizations but ask what you can do for the small businesses – every day. Those are places we go to lunch and dinner, enjoy a night out, or go to purchase something for the garden. Let’s honor them this month and support the vision, commitment, diversity, and vitality they bring to our communities. Let’s commit to making them a critical element of our strategies year over year. We need small businesses to come back as often as they need WDB support to help them succeed.


SALUTE OPEN: "Come in we're open #sign #nyc" by vanou is licensed under CC BY-NC-ND 2.0. 
SALUTE INTRO: "B&H store hours in NYC" by HVargas is licensed under CC BY-SA 2.0. 
BUSINESSES: "Storefront New Leaf" by Atelier Teee is licensed under CC BY-NC-ND 2.0. 
EMPLOYMENT: "Cafe Grumpy" by Scott Beale is licensed under CC BY-NC-ND 2.0. 
INDUSTRIES: "Construction worker for the Panama Canal expansion project" by World Bank Photo Collection is licensed under CC BY-NC-ND 2.0. 
SALUTE CLOSE: "Come in we're open #sign #nyc" by vanou is licensed under CC BY-NC-ND 2.0.