Workforce shortages and inflation are key challenges for Alaska’s small businesses, new survey says

Jon Bittner, executive head of nan Alaska Small Business Development Center, speaks to nan Anchorage Chamber of Commerce connected July 8, 2024. (Photo by Yereth Rosen/Alaska Beacon)

Inflation, operating costs and workforce shortages are nan astir communal challenges facing mini businesses successful Alaska, according to a new survey.

The Alaska Small Business Development Center study tracks mini business maturation successful nan authorities and projects early trends. This is nan seventh yearly report.

Inflation was astir often cited arsenic nan apical rumor facing Alaska’s mini businesses. However, study respondents identified ostentation arsenic an rumor for businesses much broadly, alternatively than an contiguous 1 for their circumstantial business. Only 12% named ostentation arsenic their business’s biggest challenge, nan third-highest aft uncovering clients aliases customers and their workforce.

Jon Bittner, nan executive head of nan center, underscored inflation’s effect connected agrarian mini businesses during his position for nan Anchorage Chamber of Commerce connected Monday. For mini businesses extracurricular of Anchorage, ostentation exacerbates nan longstanding rumor of precocious prices, according to Bittner.

“There’s only truthful overmuch that group are consenting to salary for things that aren’t essential,” said Bittner during his presentation. “If you’re not trading bread, water, diapers — things for illustration that — it starts to go much of a discretionary walk and you’re going to spot that successful nan information wherever group are buying less.”

Workforce shortages are an rumor for businesses crossed nan state, though it isn’t a caller problem, according to Bittner. “It’s conscionable a usability of our organization size, our ample geographic area, and our trouble successful increasing our organization done either imports aliases hirability,” he said.

According to nan survey, 58% of businesses reported challenges successful hiring caller employees, and nan largest hiring obstruction was a deficiency of qualified applicants.

For Jen Motyka, nan main invention serviceman astatine Alaska Premier Auctions & Appraisals, nan survey’s findings astir worker hiring was “spot-on.” “Every business proprietor really needs to return a look astatine their processes and spot wherever they tin streamline,” she said aft nan presentation.

Industries, particularly construction, shipping, and transportation, are besides facing steep hiring title from nan Lower 48, according to Bittner. “We’re seeing trading retired location from different states saying ‘Hey, you person a batch of options, travel here, we person a 12-month yearly building cycle, we don’t person to extremity activity for winter,’’” Bittner said. “If everybody is hiring astatine nan aforesaid time, nan system is each trying to retrieve astatine nan aforesaid time, everybody is benignant of accessing nan aforesaid superior programs connected nan national level, it’s going to beryllium much difficult than ever for america to pull group each nan measurement up here. It’s costly to unrecorded up here. It’s costly to move up here.”

In Alaska, much group proceed to leave the authorities than arrive, which has occurred for 11 consecutive years. For Bittner, nan reply to workforce improvement is simply a “homegrown” attack that focuses connected group who already unrecorded successful nan state. Tools specified arsenic nan University of Alaska and apprenticeship programs tin thief create a much specialized workforce, Bittner said successful his presentation.

Last month, Gov. Mike Dunleavy signed a measure into rule intended to incentivize Alaskan students to enactment successful authorities for assemblage and vocational training via capacity scholarships. Alaskans who be assemblage in-state are more likely to enactment present aft graduation.

Relying connected outsiders coming to nan authorities isn’t a fix-it for Alaska’s hiring squeeze, according to Bittner. “We’re going to get some, we ever have. But successful bid to lick nan benignant of spread we’re talking about, I conscionable don’t deliberation imports are going to beryllium nan answer,” he said.

Despite nan challenges, nan study yielded immoderate affirmative results: 36% of Alaska’s businesses are women-owned, which surpasses nan nationalist average. Alaska besides has nan second-largest stock of American Indian and Alaska Native-owned businesses successful nan nation.

More than half of nan surveyed businesses predicted a bully financial business for nan adjacent 12 months. “You don’t commencement a business successful Alaska if you’re a pessimist. These are nan group who person been operating successful 1 of nan astir difficult economical environments successful nan federation for generations,” said Bittner. Their expertise to accommodate to these challenges, said Bittner, is “more of a modulation than an insurmountable problem.”