How Protecting Workers’ Health and Wealth Can Help Business Owners Combat the Great Resignation

Luke PardueEconomist, Gusto

Rather than bringing a swift economic recovery, as many economists had predicted, the summer and fall of 2021 brought a nearly-unprecedented labor shortage, with a record 11 million job openings each month from July to October 2021 and a wave of employees leaving their current positions during what experts have termed “The Great Resignation.” Business owners have needed to adapt in real-time, in the midst of an ongoing pandemic, to ensure that workers feel safe and satisfied in order to retain and attract talent.

Gusto, the payroll and HR platform serving over 200,000 businesses across the country, partnered with the National Association of Women Business Owners (NAWBO) to survey over 1,000 women business owners about their experiences filling open positions in the current labor market – and strategies they have used to solve staffing shortages. In this post, we highlight findings from two areas in which relatively little data-based research has been conducted to date: the role that vaccination requirements and employee financial benefits offerings played on employee recruitment and retention during this hiring squeeze.

Key Findings

  • Hiring Squeeze: 40% of women business owners who posted an open position during the summer or fall have had trouble filling this role, with the highest rate in the Midwest (47%) and the lowest in the Northeast and West (37%). This rate of staffing difficulty is highest among women business owners in Goods-Producing sectors (e.g. Manufacturing and Construction) and lowest among firms in Professional Services. When asked to select reasons for this shortage, the number one reason chosen among owners was a mismatch in skills between open positions and applicants (51%).  
  • Employee Safety, Fear of New Variants Drive Mandates: Among all women business owners, 28% indicated that they are making COVID-19 vaccines mandatory for employees. Of those who instituted a vaccine requirement, 87% of owners responded that they did so because they wanted employees and customers to feel safe, while 52% cited fear of COVID-19 variants – suggesting that during this new Omicron wave we may see an increase in employer vaccination requirements as well. 
  • Positive Reactions to Vaccination Requirements: When asked about employee reactions, 90% of owners indicated their employees were willing to be vaccinated, while 18% had employees resisting and/or quitting (owners could select both options). After mandating vaccinations, nearly half of business owners reported that their employees took less time off and increased trust from their employees. These physical and mental benefits translated into improved staffing results: among business owners who have instituted a vaccine mandate, 31% of owners report having difficulty hiring, while among those who have not mandated vaccines, 43% have reported difficulty hiring. 
  • Financial Benefits Aimed at Recruiting and Retention: Overall, 37% of owners indicated that they offer some form of financial benefits to their employees, primarily in the form of retirement accounts. Among those who did, 48% cited employee recruitment and retention as a primary reason for offering these tools. Among those who did not, nearly one-third (32%) noted that it was because such tools were too expensive – meaning that low-cost or no-cost financial benefits could be an effective tool for many business owners to solve the current labor shortage.    

Introduction: The 2021 Hiring Squeeze

First, we quantify the extent of this hiring squeeze among women business owners and explore differences across industries and regions of the country. Overall, 41% of respondents indicated that they posted an open position to fill in the summer or fall. Among those owners, 40% reported that they experienced staffing issues or delays due to challenges with hiring. Table 1 presents the results of this question by industry group: Personal Services (e.g. Retail, Food & Beverage, Tourism); Professional Services (e.g. Finance, Insurance, Legal); Education, Healthcare, and Nonprofits; and Goods-Producing sector (e.g. Manufacturing, Construction). The highest rate of hiring difficulty is in the Goods-Producing sector, where 58% of owners who posted an open position reported staffing issues. This data contrasts with government data, which estimates that job openings are highest among firms in personal services, suggesting that women-owned businesses in these traditionally male-dominated fields such as Construction and Manufacturing are feeling the hiring squeeze more acutely.

Table 1: Percent Reporting Difficulty Filling Open Positions, Overall and by Industry Group

Industry GroupPercent Reporting Difficulty Filling Open Positions
Education, Healthcare, Nonprofits50%
Personal Services44%
Professional Services32%
Source: Gusto-NAWBO Survey

Table 2 presents the percent of women-owned business owners reporting staffing difficulties, by region of the U.S. The largest portion of owners with hiring challenges are located in the Midwest, where 47% of owners reported trouble filling an open position. The lowest portions of owners are in the Northeast and West (37%). These differences are likely in part due to regional differences in industry composition, with the West and Northeast regions composed of more easier-to-fill professional services jobs. At the same time, the South and Midwest account for more goods-producing firms. Below, however, we explore regional variation in employer vaccine mandates, finding this list nearly completely flipped – suggesting that potential employees may be taking their health into account when considering new positions.

Table 2: Difficulty Hiring, by Region

RegionPercent Reporting Difficulty Filling Open Positions
Source: Gusto-NAWBO Survey

Finally, we asked employers to select among a list of potential reasons for this hiring difficulty, with results presented in Table 3. The top response among owners was due to a mismatch in skills between open positions and applicants – over half (51%) of owners with staffing issues selected this reason. The owners choosing this reason was highest among firms in Professional Services, where 59% of respondents selected it. This mismatch is partly due to the surge in employer demand for workers with technology skills, such as computer programming, and the time it takes for workers to retrain in response to these in-demand skills. However, the second-most selected reason was that no one was applying for these open positions (45% of owners). This rate was highest among Education, Healthcare, and Nonprofits (63%) and Goods-Producing firms (51%). Taken together, these trends paint a picture of an economy in which workers are making moves from jobs with relatively little flexibility and high exposure to the ongoing pandemic to those in Professional Services, which are more likely to offer higher pay and the flexibility that employees are demanding now.     

Table 3: Barriers to Hiring, All Employers

ReasonPercent Reporting Difficulty Filling Open Positions
Mismatch in skills between open positions and applicants
No one is applying for a job45%
Priced out of employee market32%
I am doing all the hiring myself, I don’t have additional support or time23%
Years of experience isn’t matching what I’m looking for22%
Source: Gusto-NAWBO Survey


As business owners struggle to fill open positions and manage their teams through an ongoing pandemic, they are turning to various tactics to attract and retain talent – from raising wages, offering spot bonuses, taking steps to protect the health of employees and customers, and enhancing benefits offerings. One possible step owners could take to make employees feel safe in the workplace is to require COVID-19 vaccination among employees. In this survey, we asked women business owners about their decision to mandate (or not to mandate) COVID-19 vaccines for employees to gain insight on the prevalence, the reasoning behind, and the impacts of such requirements.

Among all women business owners, 28% indicated that they are making COVID-19 vaccines mandatory for employees. These requirements are fairly evenly distributed across industry groups: businesses in sectors with the most exposure, such as Personal Services or Education, Healthcare, and Nonprofits, have the highest rate of vaccine mandates (31%), while firms in Goods-Producing sectors have the lowest rate of such requirements (23%). Overall, the two individual industries with the highest rates of vaccine requirements are Food & Beverage (40%) and Events, Entertainment, and Recreation (37%).

Table 4: Employer Vaccination Requirements, Overall and by Industry Group

Industry GroupPercent Mandating COVID-19 Vaccinations
Personal Services31%
Education, Healthcare, Nonprofits31%
Professional Services29%
Source: Gusto-NAWBO Survey

Table 5 presents these rates of vaccine requirements by region of the country. 33% of women business owners in the Northeast report requiring vaccinations of employees, the highest of any region, while just 24% of owners in the Midwest, where COVID-19 cases have generally been higher over the fall and early winter, report requiring vaccinations.   

Table 5: Employer Vaccination Requirements, by Region

RegionPercent Requiring COVID-19 Vaccinations
Source: Gusto-NAWBO Survey

To gain insight into owners’ motivations in requiring vaccinations, we asked respondents to select from among a list of reasons for such mandates. To capture the array of employer experiences and concerns, we allowed owners to select multiple answers. The vast majority of owners (87%) noted that it was because they wanted employees and customers to feel safe, perhaps explaining the relatively even rates of requirements across industries – such actions are not aimed solely at comforting customers, for instance, but about making sure both workers and patrons feel comfortable interacting.

The second-most commonly selected reason was that owners were concerned about COVID-19 variants. When this survey was taken, September through November 2021, the Delta variant was the primary strain of COVID-19 after spreading quickly in the summer months. In December 2021, however, the US has seen a surge in new cases attributed to the new Omicron variant. The concern over new variants weighed so heavily on owners’ minds when mandating vaccinations suggests that we are likely to see a significant increase in employer-mandated vaccinations, or new booster requirements, as Omicron takes hold.

Table 6: Reasons for Vaccination Requirement

ReasonPercent Reporting Vaccination Requirements for the Following Reason
Because I want to ensure all my employees and customers feel safe87%
Because I am concerned about variants52%
Because we work closely with our customers and risk the spread of virus daily44%
Because some of my employees have been sick with COVID-19 which impacted our ability to serve our customers12%
Because I want to take advantage of the tax credits offered to employers who provide time off for employees who get the COVID-19 vaccine5%
Source: Gusto-NAWBO Survey

Lastly, we asked business owners about the effects of mandating vaccines for employees. When asked about employee reactions, 90% of owners indicated that they experienced employees being willing to be vaccinated, while 18% experienced employees resisting and/or quitting (owners were allowed to select both options). As shown in Table 7, 44% of owners reported that, after mandating vaccinations among employees, workers took less time off and improved attendance. Second, 43% of owners reported improved employee trust in the workplace.

Table 7: Effects of Employer Vaccination Requirements

EffectPercent Reporting Vaccination Requirements Have Caused the Following
Less time off due to illness/improved attendance44%
Improved employee trust43%
Improved employee retention18%
Delayed employee work hours9%
Delayed hiring5%
Source: Gusto-NAWBO Survey

These positive effects translated into improved staffing results as well – indeed, in this time of The Great Resignation, nearly one in five owners (18%) reported that mandating vaccinations resulted in improved employee retention. Furthermore, these requirements did not consume business resources, as just 9% reported that these requirements delayed work hours and 5% reported that it delayed hiring. The results are similarly striking when we disaggregate the first question regarding staffing difficulties by vaccination requirements. As presented at the beginning of this piece, 40% of all owners reported having difficulty hiring. Among business owners who have instituted a vaccine mandate, 31% of owners report having difficulty hiring, while among those who have not mandated vaccines, 43% have reported difficulty hiring.

Among owners of businesses in the Personal Services sector, a larger share (44%) report hiring difficulties – and the gap between those who have mandated vaccines and those who have not is wider. 28% of those who mandated vaccines report staffing issues, while 51% of those who have not mandated vaccines report such problems. Personal Services firms include retail shops, bars, restaurants, salons, and spas, among others – all businesses that require workers to have close personal contact with colleagues and customers. These results suggest that employees, particularly those open to working in high-exposure jobs, are putting their health at the forefront of their employment decisions – to a degree that may not be fully appreciated by economists, policy experts, and business owners themselves – and these workers often respond to steps owners take to make protecting their health a priority.

Financial Benefits

This pandemic has highlighted the precarious financial situation of many working families. Potential employees are now placing a premium on positions that will help them shore up their finances by offering retirement funds, savings accounts, and in particular early access to paychecks. Just as owners see that employees value actions that protect their physical health during the pandemic, they also recognize this priority workers have placed on their financial security and have taken steps to enhance such benefits to make their workplace an attractive option. Indeed, on Gusto’s platform we have seen employers raise the average size of a bonus from $552 in November 2020 to $1,675 in November 2021.  

Overall, 37% of owners indicated that they offer some form of financial benefits to their employees. As presented in Table 8, by far the most commonly offered financial benefit was a retirement plan (401k, IRA, or other), provided by 94% of employers who offered financial benefits. The second-most commonly offered benefit was a personal loan, paycheck advance, or earned wage access products (17% of owners offering financial benefits), suggesting significant employee demand for access to their paychecks ahead of the regular pay schedule.

Table 8: Type of Financial Benefit(s) Offered

BenefitPercent Offering Each Financial Benefit
Retirement plan (i.e. 401k)94%
Personal loans, paycheck advances, or earned wage access17%
Financial literacy programs14%
529 college savings plan3%
Savings account3%
Checking account1%
Source: Gusto-NAWBO Survey

Table 9 presents the distribution of responses when owners were asked to choose among a list of reasons why they offered these financial benefits. While 68% offer benefits in part because it is the right thing to do, nearly half (48%) of owners responded that they offer these benefits to help with employee recruitment and retention. This rate was highest among owners of firms with 25 or more employees, where 55% noted they offer these benefits to help with recruiting and retaining talent – because employees highly value these benefits. In a recent survey by the Society of Human Resource Management, 45% of unemployed Americans and 16% of working Americans said that access to emergency funds was one of the most important financial wellness benefits an employer could offer.  

Table 9: Reasons for Offering Financial Benefits

ReasonPercent Offering Financial Benefits for the Following Reasons
I believe it is the right thing to do68%
Help with employee recruitment and retention48%
Help keep employees financially healthy43%
I already advance wages on occasion, so offering financial benefits makes it easier for me to help my employees.6%
Source: Gusto-NAWBO Survey

Among owners who do not offer financial benefits, the cost was the most commonly cited reason for not offering such a benefit, not lack of interest or desire to provide financial benefits. As shown in Table 10, when asked why they do not offer financial benefits, 32% of owners cited that such benefits were too expensive, while just 7% said they do not see the value of offering such tools to employees. This data suggests that finding low-cost or no-cost financial benefits for employees is both an inexpensive and effective tool for business owners to attract and retain talent in this tight labor market. There is also a significant gap in why business owners do not offer financial benefits across business sizes: in this survey, 55% of owners with more than 25 employees do not offer financial benefits because they are too expensive. This disparity suggests that smaller businesses may rely on informal loans or paycheck advances, but larger firms struggle with perceived costs as they attempt to formalize these benefits. 

Table 10: Reasons for Not Offering Financial Benefits

ReasonPercent Not Offering Financial Benefits for the Following Reasons
Too expensive32%
Too complicated7%
Do not see value of offering to employees7%
My payroll company doesn’t offer this5%
Source: Gusto-NAWBO Survey


This economy is in the midst of an upheaval that has resulted in an unprecedentedly-tight labor market, with 11 million job openings in October and a record number of workers leaving their positions in search of new opportunities. Women business owners are right in the middle of this hiring squeeze, with 40% of owners reporting difficulty filling open positions. In this survey, we explored the impact on hiring and two different steps employers have taken recently that have been in the spotlight: employee vaccine mandates and expanding financial benefits. 

We find that 28% of women business owners have instituted an employee vaccination requirement, with nearly 9 in 10 doing so to make sure both customers and employees feel safe. After enacting such a policy, 90% of owners experienced employees willing to be vaccinated, and large pluralities experienced workers taking less time off (44%), improved employee trust (43%), and improved employee retention (18%). Similarly, on the side of benefits, 37% of owners reported offering financial benefits, mainly in the form of retirement funds (94% of those offering financial benefits). Despite the increased value employees place on such tools, nearly one-third of owners do not offer financial benefits because of the perceived high cost.

Workers are coming out of their experience during this pandemic putting their physical and financial health at the forefront of their career decisions. This survey shows the extent to which owners are still struggling to fill open positions, but also the positive impacts in both recruitment and retention, when employers take steps to improve the financial and physical health of their employees. Steps such as ensuring employees are vaccinated can make workers feel safer and therefore more likely to remain in their position. Women business owners are interested in providing financial benefits to their employees – and providing these benefits, like earned wage access or paycheck advance products – can help hire and retain employees. Both the pandemic and business owners’ staffing struggles are unlikely to resolve themselves any time soon. Still, this report sheds light on how entrepreneurs can take care of – and indeed grow – their teams amid these ongoing challenges.    


This study surveyed 1,001 members of NAWBO about their businesses and their experiences over the past year. Responses were collected from September 16, 2021 through November 3, 2021.

Luke Pardue Luke Pardue was an Economist at Gusto, researching how public policies help small businesses and their workers thrive. He received his Ph.D. from the University of Maryland, where he studied the effects of government programs on disadvantaged populations’ housing and labor market outcomes.
Back to top