5 Business Challenges That Can Wreak Havoc on Unprepared SMBs

The practice of fractionalizing roles within companies is not a sales scare tactic—it’s a strategic necessity backed by substantial research. Over time, small and medium-sized businesses (SMBs) will struggle to compete for specific roles, leading to extended vacancies and, eventually, desperate and often poor hiring decisions.

Consider this: A fractional employee, balancing 2-4 jobs, can exceed market wage ceilings and fit within various company budgets. They also reduce their own employment risk—losing one job doesn’t equate to losing their entire income.

When these employees are engaged with IGXperts, they develop a strong sense of loyalty, making it nearly impossible for them to recruit away. This should be a significant concern for companies hesitant to address the imminent talent crisis.

Adopting a fractional employment strategy allows your company to withstand market fluctuations and secure top talent before it’s too late.

Baby Boom Kaboom

  • Born between 1946 and 1964 (18 years), Kids of the Great Generation, parents to GenX. Parents of Boomers created many expectations between employees and employers. One of the most prevalent lessons the greatest generation taught Boomers was loyalty. If the circumstances permit, a career-minded person would take one job, possess long-term tenure expectations (lifetime in many cases), and give that company everything that's required, no matter how many hours it took. 
  • Impending Crisis: Too Many Jobs, Too Few People – A book written in 2002 observing the workplace dynamic shift and decreasing labor participation from the Boomer's exit and a technical decline of skills. This predicted a skilled shortage reaching 10.030 million by 2010. The Boomers didn't necessarily preach the same message to their kids that their parents did. Having stuck with the loyalty plan, a portion of the Boomer workforce regretted handing blind loyalty over, and many regretted that decision. As a result, many of them preached a message of "test the water," "don't lock yourself into the first thing," and "explore a few other options before settling into a long-term commitment." These were the lessons I was taught as a GenXadolescent.

COVID-19 Pandemic Shut Down

  • The shutdown was the first of its kind and resulted in many unanticipated adjustments. 
  • Many employees working from home for the first time realized that the work didn't take so long when their energy was focused on completing their objectives. 
  • Many people saw the shutdown as a good time to tackle DIY tasks, pick up new hobbies, and play board games as a family. Many didn't. The net negative effects of poor habits developed during the shutdown have yet to come in full swing. Mental health counseling is growing exponentially, and the need will remain long-term.
  • Many employees discovered that when the social dynamic of the workforce was removed, their presence in the office wasn't critical, and their social connections at work lacked real meaning.

Cost of Living Increase

  • While the American economy is not technically receding, many families have had to identify other streams of income.
  • Which corporate cost of living increase has kept pace with the cost of living (COL) increase?
  • Disposable income has been significantly reduced for most households and even for many of the highest-paid employees.
  • Employees have been faced with the difficult decision of balancing more than one job to make ends meet. Many feel compelled to hide that fact due to outdated, even unrealistic, merit-lacking policies.
  • Untapped frustration with the COL increase has replaced the sense of obligation to one’s employer and prioritized one’s family needs. In some cases, taking on a “gig economy” or a “side hustle” has become SOP.
  • Wiser leaders realize that many employees will deflect their decision to hide a second income and blame their employer for their insufficient income.

Declining Technical Degrees

  • Technical graduates are steadily declining, and America spent decades emphasizing the degree rather than the major. The result has been vastly increased workforce training and the expense associated with providing it.
  • Software developers are projected to grow faster by 2032 than IEs, MEs, and Civil Engineers combined. 
  • The American economy has an engineering deficiency with no relief in sight.
  • Big-name companies vacuum the bulk of the most talented SMEs with their larger budgets, brand recognition, and “fun” work environments.
  • Small and mid-sized companies are forced to compete with large market companies such as Google, Facebook, Toyota, Tesla, and X, to name a few.
  • Competing with the wealthiest companies is a recipe for under-hiring due to difficulty attracting “A” level talent.

Declining Loyalty

  • The days of finding one job, working there for our whole lives, and taking a pension a decade before pushing daisies are behind us. The Boomers began the weening process, GenX eliminated it, and the following have taken low loyalty to unseen levels.
  • Some studies predict that an average current college graduate would hold up to 18 jobs by the time they reach their 40th birthday.
  • Employers enjoy loyalty when it exists, but many have become bitter watching employees use valuable training to benefit another company.
  • The existing workforce has created a slew of contingencies, concessions, or demands that they aren’t shy about sharing with prospective employers.