The employee counts of businesses with fewer than 50 employees have decreased in three of the last four months according to data compiled by ADP, a national payroll company. In that same period, payrolls at larger companies increased.

The Entrepreneurs of those smaller businesses are blaming inflation as the main culprit of their hiring woes in an already difficult labor market. These difficulties are affecting the bottom lines of small businesses because they’re understaffed and unable to work at full capacity.

This is either hurting or eliminating profits altogether. According to a June survey conducted by Vistage Worldwide Inc, 63% of the small business owners surveyed said that hiring challenges are affecting their ability to operate at full capacity.

In order to combat this difficulty, 76% of small businesses have increased their wages and 44% added benefits to retain or attract more workers. Others are adding monetary bonuses to incentivise better work or performance. As always, when entrepreneurs can’t find decent employees, we step in wherever necessary to fill the gaps.

What’s happening to all of the workers who are leaving smaller companies? They’re being poached by larger organizations that can afford higher wages and larger benefit packages.

Please don’t be dismayed. In time everything will even out.