Small businesses have not had it easy over the last few years. First, we had a pandemic that disrupted the way we all lived, worked, and did business – and now? Well, now we have the beast that is inflation. You’ve probably been feeling the effects of inflation for a while now, and are probably not taking a whole lot of comfort in the fact that it’s starting to level off ever so slightly. But don’t despair, there are some strategies that small businesses can employ to cope with the effects of inflation.
How Is Inflation Affecting Small Businesses?
While inflation and supply-chain issues have been a problem since the pandemic hit in 2020, inflation really began to ramp up in the spring of 2021. In fact, according to the Bureau of Labor Statistics, inflation accelerated at a higher rate between March 2021 and September 2021 than it did at any point in 2020. And, for at least five or six months straight, 2021’s inflation rates more than doubled 2020’s highest increases.
But then came 2022, telling 2021 to hold its beer. While 2021 had the largest inflation rate in the last two decades at 4.7%, 2022 has nearly doubled that with an 8.32% inflation average (as of the summer), the highest month-over-month inflation rates since 1982.
So if you’re feeling the pinch, you’re certainly not imagining things. And you’re probably caught between a bit of a rock and hard place: your customers are looking to cut back and your costs are probably skyrocketing. You’re not alone: 92% of small-business owners reported that the cost of supplies or services needed to run their business has increased since the pandemic started.
In fact, in 2022, 71% of small-business owners reported at least a 20% increase in costs for supplies and services, with 16% saying that their costs have increased by 50%! The effect of these huge increases has been pretty brutal for small businesses. Consider these stats:
60% of small businesses are concerned about the financial health of their business because of inflation
47% report their profit margins are decreasing due to inflation
37% of small-business owners are afraid inflation will hurt the health of their business
37% report customers have complained about inflated prices at their business
30% think raising their prices will deter customers from patronizing their business
Does all of this sound familiar to you? Are you one of the 1 in 3 small business owners(according to the U.S. Chamber of Commerce) who lists inflation as their top business concern? If so, what can you do about it? Let’s take a look at what small businesses are doing to combat the effects of inflation, and what specific strategies you can try to stay afloat and keep growing during these tough times.
What Are Small Businesses Doing to Deal with Inflation?
In order to help ease the inflation rates, business owners are hiring accountants.
If so many small businesses like yours are feeling the burn from inflation, what steps are they taking to try and mitigate the effects? Unsurprisingly, there’s a lot of focus on reducing costs, as well as tracking expenses:
46% of small businesses are reducing the size of their inventory
44% are purchasing software to help track their businesses expenses
24% have hired an accountant to help find ways to save money
42% have reduced the number of employees on their team
Only 17% of small-business owners report not changing anything to reduce costs
So have you taken some of these steps, or are you considering doing so? If you’re unsure where to begin, and what strategies are right for you, check out some tips below.
Strategies to Consider
According to James Cassel, chairman and co-founder of the investment bank Cassel Salpeter, “Most business owners have experienced minimal inflation or even pricing deflation. Today’s small businesses need to be creative in their approach to dealing with inflation, as it’s not likely to go away anytime soon.” So let’s think creatively! To deal with inflation, you can:
Streamline and automate processes
Sometimes you need to invest to grow, right? So maybe you need to spend a little money on software to automate time-intensive work. Look at all the little things that take time and manpower: could scheduling, billing or collecting payments, or taking orders be automated at your business? Or think even more creatively: if you’ve got a warehouse, for example, could investing in a new shelving system streamline how you work?
Invest in your business in other ways
You can take some of your capital and put it into streamlining and automation, but you can also use it to do things like ramp up your marketing or revisit your pricing strategy in order to attract customers. And if you don’t have the money to do so, but aren’t adverse to taking on some debt via a business loan, now is the time to do so. The Fed raised interest rates in March for the first time in 2 years (so it’s not an ideal time to borrow), but we’re scheduled to see a few more hikes this year alone.
Watch your cash flow like a hawk
Now’s the time to knuckle down and really pay attention to your cash flow, since you’re between that rock and hard place we mentioned before, where you’re facing increasing expenses while at the same time losing customers or finding them slow to pay. That means you’ve got to stay on top of the money coming in, so try things like:
Invoicing customers as quickly as possible
Requiring immediate payment
Reviewing your expenses more often, ideally weekly
Running credit checks on customers
Being vigilant about your accounts, and maintaining a policy of not selling to customers with outstanding bills
Reduce costs
Prices might be rising, but there are still things you can do to try to reduce expenses in this brave new world of crazy inflation. You can:
Talk to your merchant credit card provider about lowering your rate
Switch from landlines to VoIP
Talk to your landlord about a rent reduction deal
Negotiate with your service providers
Downsize your office by offering more remote work options
Stop printing so much!
Check to make sure you aren’t paying for any unnecessary monthly subscription services or other recurring expenses
Use a cash-back credit card
Stock up on supplies while you can
It might seem counterintuitive to tell you to go stock up after we just suggested reducing expenses wherever you can, but it could be a smart move to stock up on supplies to beat any issues with the supply chain. A lot of businesses are reorganizing their spaces (it comes back to streamlining!) and buying extra of what they need, to avoid running out, and to lock in today’s “cheaper” prices before they rise again.
Increase your prices – carefully
While this isn’t the ideal solution, it might be a necessary evil. Just make sure you’re doing it judiciously, and aren’t making giant increases across the board. Consider making smaller, incremental, less noticeable changes. You can even try offering premium, paid subscriptions or memberships, or bundled offers if that’s something you can do, to bring in a little extra cash.
If you’re looking to bring in as much money as possible in these tough times, know who you should be targeting. That means analyzing your business and determining where your most profitable sales come from. Check out what the most profitable sales have in common, and then zero in on those areas or people.
But while trying to sell more to your existing customers is probably your best bet, don’t forget that inflation could actually drive some unexpected new customers in your direction. People could very well be looking for new businesses that meet their needs in terms of prices and rates, so be ready to welcome these curious customers with open arms.
Inflation stinks – for everyone. But if you’re running a small business, there’s no need to panic. You have options to beat back the inflation beast, you just have to find the right one for you. And let us know: how are you weathering things as inflation hits us all hard?
A lot of the news these days is worrying for small businesses: global pandemics, rising inflation, etc. But while you’re worrying about these more immediate threats, are you also thinking about something more long-term? Are you disturbed by climate change, and wondering if there’s anything you, with your small business, can do to help? If so, you might be feeling a bit helpless, thinking that only big businesses have the resources to reduce their carbon footprint. But that’s not necessarily true! Small businesses can get to carbon neutral, too – so take a look at the following suggestions that will benefit the environment and your business.
What Does It Mean to Be Carbon Neutral?
So when we say “carbon neutral,” what do we mean? It doesn’t mean that you (necessarily) are out there, physically cleaning up the rivers in your area. It has more to do with evening out the impact your business is making on the environment – hence, the word “neutral.”
What does that mean? Well, everything you do related to your business – driving, heating/cooling and lighting your workspace, operating a website, shipping, flying, etc – expels carbon dioxide and other greenhouse gasses into the atmosphere. We’re talking here about your business’s carbon footprint – and that footprint can be pretty big, and pretty hard to rein in.
But, with that being said, there are things you can do to both reduce your carbon output and offset it, essentially bringing your carbon output down to a net zero, even though you’ll still be necessarily engaging in activities that produce carbon. In other words, for every ounce of carbon that you have to dump into the atmosphere, you find a way to remove an ounce.
The Benefits for Small Businesses of Going Carbon Neutral
If offsetting your carbon output to bring your business to carbon neutral sounds, well, a bit complicated and time-consuming, we’re not going to lie – it can be. But taking the time to do it is not only good for the world; it can also be good for your business. So before we get to the specific steps you can take to make the process of getting to carbon neutral easier, let’s look at how doing so can be beneficial for you:
You won’t be just another “greenwasher” – Nowadays, with so many consumers more concerned about the environment, a lot of businesses are trying to tout their “green” credentials, but aren’t exactly making the grade. Consumers are becoming a lot more savvy when it comes to greenwashing (or businesses offering exaggerated, misleading, or unsupported claims about their environmental practices), so if you can both talk the talk and walk the walk, you could come out ahead of your competition. In fact, consider this: almost 70% of Americans say they are willing to pay more for brands that help them reduce their negative impact on the environment, and more than 80% prefer to buy from sustainable sellers.
Investments in green energy are good investments – Yes, it can be pretty pricey to switch to renewable forms of energy, but if you do invest in solar panels, for example, your monthly energy bills will reduced, and any surplus energy your solar energy systems produces can be sold back to suppliers, which will generate additional income for your business. But even if you don’t want to make a huge investment in a new renewable energy system, any reduction in energy use will save you money!
The benefits sound great, of course, but can your small business actually afford the process of getting to carbon neutral, both in terms of money and time? If you take a look at the following steps, you might find that it can actually work for your small business, with some planning (and you might even end up saving some money!)
Steps You Can Take
Working towards carbon neutrality requires some bigger-picture thinking and strategic planning. Yes, little things like putting out more recycling bins can all add up, but you really need to be doing more tracking of what you’re currently using/outputting, and researching ways to offset. But don’t worry: everything you do will help! So here’s where to start:
To reduce your emissions, you must first calculate how much you use.
1. Calculate your emissions
Before you set out to reduce your emissions, it’s a good idea to get an idea of the baseline from which you’re starting. Head online and look for calculators that allow businesses to figure out what they’re putting out there, so you know what you’re going to need to lower, and you can set goals for reduction.
2. Make a plan, and stick to it
Like we said, any little bit helps, but if you’re really committed to getting to carbon neutral, you’ll need to have a plan that includes systematically figuring out where you’re going to implement changes to curb your emissions. This will also help you know how much you’ll need to spend on cutting your emissions – and how much you could save.
You can then set a goal for becoming carbon neutral, say, in 5 years. Your goal could look like this:
Year 1 Target: 20 % reduction in baseline emissions via energy efficiency actions or carbon offsets.
Year 2 Target: 40% reduction in baseline emissions via energy efficiency actions or carbon offsets
Etc
Now, check out the following steps to begin making your carbon reduction and offsetting plan.
3. Reduce, reuse, recycle
Yep, just like a lot of people are trying to do in their daily lives, you’ll have to get down to the process of reducing, reusing, and recycling – but on a bigger and more strategic scale, of course. Again, it goes beyond putting the right bins out. You can:
Move towards post-consumer waste products wherever possible
Decrease or eliminate the single-use materials you use – There are often biodegradable options to replace plastics (think paper or raffia), or better yet, reuse what you already have.
Think about sourcing – Remember, if you’re getting supplies or packing materials that come from halfway across the world, you’re already accumulating a carbon footprint.
Recycle everything you can’t reduce – The goal is to get those trash cans as empty as possible! You can even consider composting any food waste your business generates.
3. Get Energy Efficient
Switching to solar or other types of renewable energy would be ideal, but if that’s not in the cards right now, there are other ways you can be more energy efficient at your business. You can:
Switch to LED lighting
Utilize as much natural light as possible
Use timers and motion sensors for your lighting
Invest in energy-efficient appliances
Clean your air filters
4. Travel less
Do you and your employees fly and/or drive a lot for your business? Consider this: one little flight from NY to Seattle emits half a metric ton of CO2! And driving? The average driver emits 4.6 metric tons of CO2 a year, but if you’re taking extra road trips for business, you’re emitting even more. You can’t always avoid driving and flying, but you shouldn’t book business trips willy nilly, or should try to find more sustainable ways of traveling whenever possible.
5. Get employees on board
Speaking of the actions we take that make a difference, like driving, talk to your employees about your desire to take your business to carbon neutral and get them on board in doing their part. Encourage carpooling or biking, and consider asking them to agree to meatless foods for catered events. And of course, they can do their part by recycling, or even coming up with innovative ways to reduce and reuse! Don’t forget to ask them to communicate your business’s green ambitions to your customers, so everyone knows about your efforts.
6. Offset all that pesky remaining carbon
All of the above is a great start when it comes to reducing your environmental impact, but it’s simply impossible to cut all carbon emissions without closing up shop. So the final thing you can do is offset your carbon. You can hire an organization to do it for you, but that’s a big investment for many small businesses.
So instead, you can calculate your new carbon footprint after implementing all of your new policies, and find projects like wind farms, landfill gas capture, or reforestation to invest in. Programs like these help either remove harmful excess emissions like carbon and methane from the environment or lessen our reliance on non-renewable resources, meaning the money you give them will essentially be making things even when it comes to your carbon emissions. And that’s where carbon neutrality comes in: the goal is to be at net zero in terms of emissions.
One important thing to note about carbon offsetting: be sure to check that the projects you’re funding are legitimate, and are third-party verified!
The road to becoming carbon neutral is by no means an easy one, but it’s worth it if it’s something you believe in. The actions you take now could mean a secure future for your business and our planet – so let us know if getting to carbon neutral is a goal of yours, and how you plan on getting there!
Ah, the new normal. When the Covid-19 pandemic hit in 2020, many businesses were forced to switch to a remote work model…that never really went away. And not only because there are still worries about safety, but also because a lot of business owners – and workers – just prefer the flexibility (among other benefits) of hybrid or fully remote work. But just because workers are on the hunt for remote positions, doesn’t mean business owners can simply dangle that one perk and expect tons of bites.
Why? Well, there are a lot of businesses out there offering remote work, so you need to find ways to stand out from the crowd. Find out what the state of remote work looks like now, and how you can offer the perks that will get the attention of top talent.
The Benefits of Remote Work
75% of employees believe they have a better work-life balance working remotely.
There was a time, alllll the way back in 2019, when not everyone had the option to work from home. But then a little thing called the Covid-19 pandemic came along and changed everything. And now, while most of us are longing for most things to go back to normal, there are a few things that a lot of people want to stick around – one of them being the option to work from home.
So how do employees feel about remote work in 2022? Well, Pew researchers have found that 60% of workers with jobs that can be done from home say they’d like to work from home all or most of the time when the pandemic is over if given the choice. This is up from 54% in 2020. And there are reasons why employees seem to want to hold onto this option (beyond the ability to spend more time in their pajamas). Consider these stats:
75% of employees believe they have a better work-life balance working remotely
57% say they have less stress when working from home
54% say they have improved morale
62% of workers feel remote work positively affects their work engagement, with 78% of remote work employees reporting feeling “highly engaged” in their work (as compared to only 72% of in-office employees)
And consider these benefits that also benefit you:
21% of workers are willing to give up vacation time for flexible work options, and at least 16% would give up employer-matching retirement contributions
Turnover reduces by 50% when employees have access to a remote work option
94% of employees report feeling like their work productivity is the same or higher than before they worked remotely, and research shows that when employees are able to work from home, their performance increases by at least 22%
Absences and sick days are reduced by at least 50% when employees work from home
How Many Employees Are Working Remotely?
So it seems like working from home is what employees still want (despite an almost universal hatred of endless Zoom meetings), and there are reasons for you to be willing to offer it. But before we get to ways to get the best remote employees, let’s look at why you might be in for some competition when it comes to hiring.
It’s estimated that 22% of the workforce (36.2 Million Americans) will work remotely by 2025
More than 4.7 million people work remotely at least half the time in the United States
Around 62% of workers aged 22 to 65 claim to work remotely at least occasionally
After COVID-19, 92% of people surveyed expect to work from home at least 1 day per week, and 80% expect to work at least 3 days from home per week
And, since 59% of respondents said they would be more likely to choose an employer who offered remote work compared to those who didn’t, you’ve made the right choice by looking for employees to work remotely. So how can you attract remote workers to your business?
How to Stand Out from the Crowd
To stand out from the crowd, you’ll have to change up your traditional work perk offerings to align with what employees now expect from our new way of working. Consider offering the following perks:
Mental health days – Remote workers might have more flexibility and feel more relaxed in their home environment, but that doesn’t mean that they don’t feel any stress. In fact, since work can start to creep into home life when there’s no distance between the two, remote workers might need mental health days more than ever to give them the space they need. You can also consider offering access to online mental health resources, should employees need extra help.
All the workplace bling – Working from a couch or bed or on a kitchen chair just ain’t gonna cut it. Consider offering your remote employees improvements to their home office setups, like standing mats, an adjustable desk, a chair with lumbar support, a power hub, a standing desk, or anything else that could make their workday more comfortable and productive. In addition, make sure they have access to all the tech, apps, software, etc that will make work and office communication go more smoothly.
Virtual versions of workplace fun – Just because you’re remote doesn’t mean you can’t have fun together! You can make a virtual version of any fun office events or groups, like book clubs, fitness challenges, fantasy sports leagues, or even pizza parties – go on, we dare you to send a pizza to all of your employees’ houses! And for individual well-being, you can still offer remote employees access to a gym near
them, or discounts for healthy food delivery subscriptions
Flexible work hours – This new normal is all about flexibility, and that should include how you allow workers to deal with asynchronous work time. Your employees might be juggling multiple responsibilities if they’re home all the time, so give them the leeway to get non-time-sensitive things done on their own time. Remember, it’s all about their results, not necessarily when they get things done.
In-person retreats – Working from home is great, but sometimes remote employees can crave a little facetime IRL – and we’re not talking about a quarterly meeting (bo-ring!) We’re talking about an actual retreat, whether you can only swing an afternoon BBQ or sporting/cultural event, or can splash out on a weekend at a resort chain, families in tow.
Training and education resources – There are tons of online options for courses and continuing education out there (like Masterclass), and you can offer access to desirable options to your remote employees.
Unlimited time off – Sounds crazy, right? But more and more remote offices are letting people take unlimited vacation time, within reason. This is because one of remote workers’ main challenges is to separate work from personal life, as pointed out above. Offering remote workers unlimited vacation leave or creating a program that provides top-performing and loyal employees additional or unlimited vacation leave credits can make your business stand out from other competitors.
If you’re going the remote route, you’re not alone, and you’re probably doing something positive for your business and your employees. But, since you’re not alone, you’re going to have to find ways to keep your employees happy! Since you don’t have the traditional workplace perks to fall back on, try the above suggestions to ensure that you attract top talent, and that you’ve got happy, healthy, and productive employees who will stay with you for the long haul. And let us know: are you all remote? Hybrid? How have you adapted to the new normal, and what perks have been most popular with your remote employees?
Why do customers choose to purchase goods or services from a specific business? In some cases, it’s purely about price, or because few other options exist – but what if the business in question isn’t the cheapest option, and is competing against others? How do they get their share of the market? Well, they often focus on making connections with their customers, appealing to them emotionally, and building loyalty. They also create a positive culture in their business, so employees can radiate outward that positivity, and further attract customers.
All of this doesn’t happen overnight, and it takes work and creativity, but if you’re looking to do it, a great way to set the wheels in motion is by being very clear about the values of your business and its purpose. And while you might be thinking: “I feel pretty sure about the values and purpose I’ve brought to my business,” you might not have solidified what your business is really all about in the minds of your customers, or even in the minds of your employees. There are multiple ways you can convey your purpose to others, and build brand loyalty and profitability in the process, but a great way to start is with a mission statement.
What Is a Mission Statement?
A mission statement is a way of both showing how you stand out from the crowd and connecting with customers.
What sounds more appealing to you: “To build giant stores that people can wander around for a while looking for cheap home goods,” or “To create a better everyday life for the many people”? We’re going to place a pretty safe bet that most people will say the latter, which is the actual mission statement of Swedish furniture and home goods store IKEA.
Or how about these: “To develop a network of coffee shops in every major market, and change the basic model of cafe culture,” or “To inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time”? The latter is the mission statement of Starbucks, and you can see that’s been carefully crafted to evoke a certain feeling as opposed to simply stating what their money-making venture is all about.
So, then, if we want to define a company mission statement, we’re not going to talk about a simple statement of your business’s desire to be the best in your field, make the best product, etc. A mission statement is a way of both showing how you stand out from the crowd (usually for your values), and a way of making a connection with your customers. That means it’s also usually a balance of conveying your public image and being a part of your internal communications.
That can be a tall order, especially when you consider that it’s usually boiled down into a sentence or two – but that’s actually a good thing. Creating a mission statement can actually be beneficial not just because it can inspire customers and employees, but also because the act of writing it can help you to distill in your mind the values and purpose that you bring to your business.
Why Is a Mission Statement Important?
So that makes this one little statement sound pretty weighty, and it is. The vision that you come up with for your mission statement can help you and your team make big-picture decisions, but it’s not just that. Mission statements are important because:
Customers love a company with values – In fact, A 2020 study by global communications agency Zeno Group found that if consumers think a company has a strong purpose, they are 4 times more likely to purchase from the company, and 4.5 times more likely to recommend the company to family and friends.
Employees want a sense of purpose – According to a recent Gallup poll, Gen Z and Millennials (who make up nearly half of the full-time workforce in the US) value belonging to a company with a strong moral compass.
A Closer Look at Purpose
Ok, so we’ve said a lot now about what mission statements need to convey, why they can be so helpful for your business, and we’ve even shown you a few examples…but how do you go about crafting yours? Before you put pen to paper, you need to consider more than just the definition of a mission statement, you need to really look at its purpose. Consider this list of the purposes of mission statements, which should help you as you brainstorm yours. Mission statements should help:
Guide your business forward – By identifying your purpose, you can better understand your goals
Focus your energy and attention – Once you isolate the most important part of your organization’s purpose, you can make sure everything you’re doing aligns with that, which can help you refocus if things become too scattered
Spark new ideas – Writing your mission statement could help you see your business with new eyes
Shape company culture
Establish consistency
Send a powerful message to the public
Drive action
How to Craft Your Mission Statement
Once you’ve thought about all of the above, it’s time to get crafting! Follow these steps for getting your mission statement down on paper, and out into the world:
Yes, we said that your mission statement should be so much more than just a simple description of your business, but it still needs to incorporate the basics of what you do. After all, prospects need to understand what you offer in literal terms, too! Think of answering questions like:
What product or service does your business sell?
Why would customers buy it?
What problem do you solve?
2. Identify your business’s core values
Now it’s time to get a little less literal and to think bigger. It’s time to brainstorm on the topic of your company’s core values; a good way to do this is to list words that you think pertain to these values. Think words like: empathetic, transparent, remarkable – anything that evokes positive emotions and reflects your values.
3. Make a connection
Next, you’ll have to make a connection between your core values and the product/service you offer. Remember Starbucks and their mission statement? It might seem tough to connect coffee and light bites to a core value, but they managed it by making a connection to community building.
4. Now mix!
At this point, you might have two separate statements about your purpose and your literal offerings, so now it’s time to condense them down into one. Do this by boiling things down to the what, who, and why of your business:
What you offer
Who you’re offering it to
Why you do what you do (your core values)
5. Refine it
You’ve probably got a pretty good statement of your core values and purpose (both in the literal more figurative senses) by now, but don’t stop there. Fine-tune it, cut out the fluff, and make sure it outlines the purpose of your company offering, and demonstrates the common goals the company is working to achieve as clearly and concisely as possible. Have other people read it (especially your team members) so you can get feedback on how evocative your statement really is. Remember: your mission statement should reflect the unique voice and culture of your company.
Mission statements can be incredibly powerful tools: they can determine how you begin, how you grow, and where your future lies. Think carefully before creating yours, so you can craft one that inspires both your team and your customers – and remember that the act of doing so can help you to think more deeply about the path of your business, as well as how you want the public to see you. Follow the tips above (and check out some other company mission statements) and you’ll be able to craft a statement that reflects your unique vision and purpose – and we want to see it!
Ok, time’s up: what’s your answer? Which generation is the largest consumer group in the US? If you said Millennials, you’re partly right, but it’s actually a little more complicated than that. What do we mean? Well, Millennials have overtaken Baby Boomers as the largest generation (in US history!), but that doesn’t necessarily mean that they’re always outspending Baby Boomers. We’ve found some interesting information that suggests you shouldn’t put all of your efforts into catering to the younger generations just yet, because it doesn’t look like Baby Boomers will be slowing down as consumers anytime soon.
Why Boomers Are Still the Big Spenders
So if there are so many Millennials, why is it that Boomers are such a big-spending class of consumers? Well, the so-called “silver economy” is booming (no pun intended) for a few reasons:
Seniors are rapidly growing in number – It’s true that Millennials have finally replaced Boomers as the largest generation in American history, but the number of older adults in the US – and the world – is still growing at an incredible pace. Think about this: there are currently 750 million seniors in the world, and that figure will cross the 1 billion mark by 2030; not only that, but the number of seniors is growing by 3.2% every year (compared to 0.8 percent of the whole population). In the US alone, the number of seniors has shot up by well over 10 million in the last few years.
And get this: economists predict that the consumer class in the world (defined as everyone spending at least $11 a day) will jump from 3.9 billion in 2020 to 5.6 billion by 2030, with each age group contributing an average of 41% to this increase – except for the senior group, whose representation in the consumer class is expected to surge by 66%!
Seniors have more money – Yes, we often hear about struggling seniors, but on the whole, the older generations tend to be wealthier than the younger ones. 76% of them are still in the spending class, compared to 66% of the population as a whole. Not only that, but they are working much longer than they used to, and putting off retirement while also making sure they have money for things like travel and discretionary treats.
Current Spending Vs Long-Term Loyalty
All of the above means that, according to Visa, “consumers over 50 now account for more than half of all U.S. spending.” And: “While the share of spending among younger consumers is expected to decline over the next 10 years, older boomers should gradually spend more, with those aged 60+ reaching a 33% share of aggregate spending by 2025.”
So, although Millennials and Gen Z have enormous potential as customers both because of their current spending and their ability to be loyal in the long-term, Baby Boomers, again, are just more likely to be spending now. And not just because they’re retired and have fewer responsibilities, or that they’ve had time to build up wealth, as we’ve already pointed out – but also because they are actually more likely to have stable jobs.
Baby Boomers are just more likely to be spending now.
Even before the pandemic, the last 5 or so years have seen very slow growth in the labor force in most segments of the population. In fact, workforce participation has been declining, dropping from 67% a few decades ago all the way down to 62.2% in 2022. But you know who hasn’t seen this decline? People over 50: the only age group showing growth in labor force participation is people aged 60 and older.
Why might this be? There are any number of reasons, including insufficient skills, the number of people attending college, etc – but one of the major factors is the lack of parental leave and affordable childcare for younger workers. That means younger women especially are having trouble staying in the workforce, while older women are at over 64% participation now, compared to just 59% in 2012.
So we’ll say it again: as tempting as it is these days to spend your time aggressively marketing to the younger folks, you simply can’t ignore the “silver economy.” People aged 50, 60, or even 70 and older are out there, shopping (especially online), and, unless your product or service is very narrowly focused on a younger demographic, it would be unwise to ignore or alienate them.
Today’s Consumer Demographics: Who to Target
With all of that being said, let’s broaden our scope now and talk a little bit about the most important demographics to target in the 2020s. Why? Because, as we have pointed out, younger generations are also extremely important, especially since they’ll be customers for longer. So, again, unless you have a very specific demographic that you cater to, you should be thinking about how to reach the following groups:
1. “The Free Bird”
This segment includes some of the Boomers we’ve been talking about: the ones that are retired (or have more flexibility), have saved up, have few responsibilities, and are looking to spend on new experiences. Remember, this group is living the “60 is the new 40” lifestyle, and are generally healthier, living longer, more tech savvy, and more desirous of staying connected with friends and loved ones, so the biggest mistake you can make is marketing to them as if they’re “old people.”
2. Millennial Parents
Yup, Millennials are parents now! Where did the time go? Seems like they were just the ones coming up with MySpace and now they’re raising a whole new generation! And they take that responsibility very seriously, but also, on the other hand, don’t want to take themselves too seriously as parents. That means recognizing that their children are their world, as well as emphasizing the good your business does for the world (whether philanthropically or for the environment), while keeping your marketing lighthearted and fun.
3. “Health-Curious Millennials”
There are a whole lot of Millennials out there who are into the idea of getting healthier and living well, but aren’t quite sure yet of the path that’s right for them. That means they’re doing a lot of exploring, so brands that can be a partner in their quest for self-improvement will be able to influence their decision-making and gain loyal customers.
4. “The New Independent”
Did you know that single people now make up a majority of the adult population? And we would argue that brands don’t often get it right when it comes to marketing to them – and these “new independent” consumers pick up on that. These are people who are socially active but not ready to settle down, and have money to spend on things they want. If you can show that you understand their lifestyle, you could end up with a large and loyal group of customers. Remember, too, that this group could be young or older, as we’ve already pointed out!
You knew they had to make an appearance on this list: the up-and-coming Gen Zers, stereotypically glued to their screens and living through social media. They’re starting to gain financial independence (yikes!), and since they go online for everything, you’ll have to be there to meet them. With that being said, though, while they do most of their research online, many of them prefer to actually shop in person once they’re ready, so you have to be flexible when dealing with them. In addition, like Millennial parents, they appreciate brands that align with their values (charitable, environmental, etc), and also want businesses to understand their emotional needs.
Truly knowing your customers can seem like a daunting task, but you’ve got to start somewhere, right? The first thing to understand is who is out there shopping, so you’re not making a mistake in your marketing from the get-go. You certainly can’t ignore whole segments of the population, for example, especially if they’re the ones doing a big chunk of the spending. So consider the info we’ve given above, and think about who you might be forgetting in your marketing – and let us know who your biggest spenders are!
Recruiting employees is tough, especially these days: there’s a lot of competition for the best candidates. And once you’ve got some of that coveted talent? It can be just as hard to keep them. On both of these fronts, the so-called Great Resignation seems to have reset things for businesses and employers, meaning that you’ve got to work harder than ever when it comes to not only finding great employees, but also finding ways to retain your top talent. So if you’ve got the employees you really want, what can you do to keep them around for good?
The State of the Job Market for Employers
If anyone thought that the Covid-19 pandemic that began in 2020 would mean soaring unemployment rates for the long term, they were dead wrong. The unemployment rate was just 3.6% this past spring and summer, and businesses were adding around 400,000 jobs a month, while just around 330,000 people were entering the workforce.
So it’s not surprising that 44% of employers report that hiring new employees is more difficult now than it was pre-pandemic. Employers have been scrambling to compete for workers, and are offering more flexible schedules, better benefits, and higher wages. In fact, in May, hourly wages were 5.2% higher than they were a year ago. But many businesses are still having trouble, and that might be because they’re just out of sync with what today’s choosier candidates want.
Why Employees Say Sayonara
So why are candidates not saying yes to some offers, and also why are employees leaving the jobs they do have? Well, let’s first look at what we mean when we say that part of the problem is employers are out of sync with what workers want:
Workers list ‘flexible schedules’ as their top priority, but only one-third of employers give workers the option to create their own schedules
59% of people are looking for higher pay, but only 40% of employers have raised salaries
Workers are also seeking jobs with good health insurance and retirement benefits, but only about 1 in 5 employers have started offering or improved benefits in these areas
But it’s not just about the nitty gritty practical stuff. According to Pew Research, while low pay is the top reason that people leave their jobs, the other top two reasons are lack of opportunity for advancement, and feeling disrespected at work. Think about this: Gallup found that two-thirds of workers don’t feel they have a supportive, respectful leader who helps cultivate a working environment that promotes engagement. That’s certainly something to think about, while also thinking about ways to support employees practically, like offering healthcare or help with childcare.
How to Get Them to Stick Around
You don’t have infinite money to offer your employees giant raises, but you can pay them fairly, and also use other strategies to keep the best of the bunch from jumping ship:
1. Start by recruiting right
Keeping employees for the long run starts with recruiting the right employees. For example, when looking at candidates, in addition to focusing on their skills and experience, you should also take a look at:
How long they have stuck with previous jobs
If they have other things they commit to, like team sports or volunteering
If they seem to share your and your business’ values, since this will make them more likely to stick with you
2. Help them unleash their passion
Why do employees waste time at work, why do they fall down on their productivity levels – and why do they sometimes ultimately leave their jobs? Because they’re just not engaged enough at work! Employees want to be challenged and engaged; they want to be able to use their talents, so it’s up to you to know where what they’re passionate about, and how you can align their projects with their passions. That means asking questions and getting to know what makes them tick, so you’ll have a better idea of how to fire them up. Not only will they be at peak performance, but their feeling of commitment to your organization will grow and grow.
3. Use “stay interviews”
Conduct interviews with employees to see what issues they are having and how you can help.
Speaking of asking employees questions, you can do that by conducting what’s known as “stay interviews.” You’ve probably heard of exit interviews (and might be feeling frustrated right about now for having to do so many of them!), but they only allow you to hear about what employees were dissatisfied with when there’s no chance of resolving the issues. But with stay interviews, you get a chance to talk to your employees while they’re still on your payroll, and get a sense of what they need and how you can keep them motivated (both to work hard and to stay with you).
What should you ask? Focus on questions that are more open-ended and will give your employees the opportunity to open up, like:
What excites you about the work you’re doing right now?
What would you like to learn in the near future?
What do you look forward to/dread about work?
What talents do you feel you’re not using in your current role?
What would you cut out of your job if you could?
Do you feel you’re getting clear goals and objectives?
What would make your job more satisfying?
What can I, as a manager, do more or less of?
Do you feel valued and recognized?
How would you like to be recognized?
4. Provide clear paths to advancement
Glassdoor research shows that 73% of workers end up quitting just to get the position they want. Other studies show that 80% of younger workers would leave their job if not offered career advancement opportunities, so you have to be able to give them what they crave. After all, you wanted workers with ambition, so that means you can’t expect them to stay satisfied in their current position forever. This can mean giving them clear paths to advancement in any ways that make sense for your company, like offering a mentoring program and/or continuing education opportunities, guiding them through your succession plan, or even creating new positions that would be a better fit for the more experienced employee they have become.
5. Allow your employees to cross-train
Speaking of succession planning, you might have thought about cross-training some of your employees so that you have people who can step up if you lose an employee. But you can also use cross-training to keep employees from getting bored, especially those who have pretty narrow roles. Cross-training can provide fresh experiences and stave off the boredom that can boost turnover, while also allowing employees to tap into unknown strengths and skills -which could end up being surprising and enlightening for you, too!
6. Never dismiss their ideas
Here’s one for the “don’t” pile. You might have the final say on everything from the direction that your business is going in, to the little everyday decisions, but the brightest stars on your team are out there, doing the work that needs to be done to keep everything keepin’ on. That means they’re bound to have their own ideas – and the worst thing you can do is frustrate them by continually dismissing their ideas out of hand. Even if you don’t think the idea will work, give them the respect of talking it through with them, and explaining your position. And when they come up with something brilliant, well…
7. Don’t forget to give props!
There are so many practical things you can do to make sure you keep your employees happy: offer a comprehensive benefits package, give them the most competitive compensation you can, offer advancement opportunities, and be open to a flexible work environment, to name a few. But there’s one thing you shouldn’t forget to do that isn’t as complicated as all of the above: give shout-outs and recognition to your team! After all, they’re what makes your business tick, and without them, where would you be?
So treat them like the assets that they are, let them know how much they would be missed if they left, and always give credit where credit is due. Consider offering bonuses, whether monetary or gifts, but also remember that publicly acknowledging the work they’re doing can be more powerful than you might think.
We hope you’ve put together your dream team – after all, that’s looking more and more like a tall order these days! So it’s more important than ever to hold onto your talented employees; you can do so by following the tips above, and by being a respectful employer that really listens to the needs of the employees. Do all of that, and you’ll build a loyal and productive team that keeps your business growing for years to come.
