Small business owners reveal that hiring and retaining talent is the most significant business challenge, according to a quarterly survey by Vistage Worldwide.

More than one-third of the 1,300 respondents surveyed cite staffing as the most significant issue they are currently facing, including identifying qualified candidates, hiring, retaining valuable staff members, and training.

Additionally, CEOs note that their companies’ biggest barrier to innovation is talent, pointing to a common theme, and the importance of having a talent management and acquisition strategy in place.

In the second quarter of 2016, CEO optimism in the economy declined across the board to its lowest level in three years. Political uncertainty during times of presidential elections has influenced confidence in the past, with a low point following the 2012 presidential election.

Half of surveyed respondents plan to increase their firms’ total number of employees in the next 12 months. Other notable findings from the survey include:

• 83 percent of respondents note that their team is made up of multiple generations – college interns through employees nearing retirement. And half of respondents are planning to hire recent college grads.

See: Top 4 Recruiting Challenges in 2016

• Due to the influx of millennial workers, nearly two-thirds of companies have adapted their management style in the past five years, and 57 percent of respondents now offer different benefit packages or perks to attract young talent.
• Although 82 percent of CEOs conduct performance reviews of their employees, 60 percent of CEOs do not have a system in place for a self-review within their company.
• The biggest barrier to innovation for 30 percent of small business CEOs is finding employees with the right talent and skills.
• 83 percent of CEOs encourage all their employees to use their vacation days, although about half expect employees to check and respond to email while on vacation.
• 64 percent of all CEOs have adapted their management style to younger workers, with 57 percent offering specially designed benefi­t packages to attract young talent.
• 82 percent CEOs conduct employee performance reviews, although 60 percent of CEOs don’t have a system in place for evaluating their own performance.

“Talent is the key to the success of any organization, especially in small business,” said Michael Molina, Chief Human Resources Officer of Vistage Worldwide. “Having processes in place to recruit top talent, transparent communication with employees, and a program for the CEO’s growth and development are critical to keeping an organization moving in the right direction.”

Also read: Bridging the Gap between What Jobseekers Want and What Employers Deliver

Image credit: LinkedIn