hiring challenges & Social Security shortages:
what business owners need to know
Hiring Challenges and Social Security Shortages: What Business Owners Need To Know
As 2021 draws to a close, it’s prime time for business owners to pat themselves on the back for a successful year while taking some time to evaluate the current economic situation in the U.S. to strategize and focus on what will be coming down the line in 2022 and beyond.
We recently sat down with Patrick Moraites, partner, and VP of Tampa-based AXIS Group and serial entrepreneur, to discuss some of the pressing issues and concerns that are impacting business owners right now and the expectations for the future.
Most notably, the effects of the pandemic continue to be felt in the workplace and beyond; The hospitality industry is one of the largest casualties to date. The impact is real, in 2020, roughly 90,000+ restaurants have permanently closed their doors. Those who managed to weather the storm and survive have felt severe financial impacts and labor shortages. Currently, many restaurants are struggling as they continue to deal with the stresses of being understaffed and undersupplied, but unfortunately, this problem isn’t unique or new to the foodservice industry.
“All of our clients across the board in all industries are having trouble with hiring, the hospitality industry is just more apparent because they were staples in their communities.” he said. “There’s no shortage of jobs available – it’s just that employers aren’t able to fill them for whatever reason. It could be due to the shift in generations and social stigma of taking entry level positions, who knows.”
The numbers are more than proof to back his statement up. According to the U.S. Bureau of Labor Statistics, in August, there were more than 10 million job openings across the country. However, the Labor Department’s September jobs report said there are five million fewer people working than before the pandemic hit, and three million fewer people searching for work. While many have speculated that generous unemployment benefits are the reason people aren’t going back to work, economists say there are other factors at play including continued fears over getting sick, the stress of managing childcare, and the rise of freelance work. Additionally, many people’s priorities have shifted during the pandemic and those who lost their jobs are being more selective about their next career moves or are exploring entrepreneurship to have more freedom with their schedule.
Many older Americans rely on social security to cover their necessities and some for their livelihood. There could be trouble lurking around the corner for those individuals. According to the annual Trustees Report, the Social Security Trust Fund will be depleted by 2033. That means that after 2033, payouts will drop by nearly 25% percent unless Congress acts to prevent it from going bankrupt. To break it down even further, the saved assets of the Disability Insurance Trust Fund project are slated to only last until 2057, while Medicare’s Hospital Insurance Trust Fund (Part A), is expected to run out of assets in 2026. That is only 5 years away. As you might expect, the pandemic has greatly impacted the financial situation with social security in addition to increased health issues and mortality rates due to COVID-19 which may lower social security payouts even more while increasing payouts for disability and Medicare. Only time will tell.
“Since we’ve been borrowing against the trust fund for so many years, there’s not going to be any money left for people who were relying on that money for survival post-retirement,” Moraites said.
“And when you compound that with the rising cost of living, housing shortages, and inflation, it’s really a very scary time to be approaching the later years of life. Younger generations luckily will have time to invest wisely to stabilize their financial future as a safety net just in case the social security situation is not remedied.”
With so many drastic changes happening so quickly and frequently, it can be overwhelming to stay on top of everything, especially if you’re a small business owner who is handling dozens of other tasks. The stress of owning a business is enough as it is, when you have an uncertain economy to deal with in addition, you need to bring in some additional support to reduce your workload so you can focus on your business. This is where hiring a Professional Employer Organization, also known as PEO, can be a smart decision to stabilize the financial future of your company while reducing your overall risk.
PEOs, which are single-source providers of integrated business support services, allow business owners to outsource many tasks related to human resources, administrative, employee management, and employment-related tasks. By working with a PEO, employers can take advantage of the knowledge and expertise PEO’s have due to the volume of businesses they support. PEOs are laser-focused on employment and regulatory issues as they occur keeping you on top of compliance & in the loop with current changes. Their experience and access to the latest information help protect the businesses they manage (yours included) to influence growth.
“PEOs can help your business stay compliant with any state or federal changes as they roll out,” Patrick Moraites said. “They really can give you peace of mind and the additional support you need to optimize while saving you time, and that’s something every single business owner needs.”
Interested in learning more about PEOs and how they can help support your small business? Contact the experts at AXIS Group via phone or email by clicking here.