Just a few years ago we thought we had the best of times. We could continue to grow forever if only we had the right people. The problem was unemployment was so low (under 5%) it was hard to keep good talent on your team. The moment you had a good team, a member would leave for a higher salary or signing bonus from somewhere else. It was difficult to keep the same team members in your business. Although sales were lining up, efficiencies were being challenged due to the lack of consistent team members, which led to inconsistent quality and higher training costs. These elements challenged one’s business reputation.As the economy slowed down, large corporations began making cost cutting decisions. One of these cost cutting decisions was to reduce the employee count and labor costs. As the employee dismissals increased so did the unemployment rate. Small businesses were slow to implement cost cutting measures including dismissing employees.The great recession felt more like a depression for small businesses, especially those who depend on other small businesses and consumer discretionary spending. The focus changed quickly to fear and panic. The shift in focus was to survival. Why worry about anything else when you have the next payroll or rent to make?But the first signs of recovery are just now trickling down from mega corporations to main street businesses. It took almost two years after the recovery of large corporations for the effects to trickle down to local businesses. And now recovery seems to be more and more stable, slowly growing. It may not be exciting yet, but by the end of 2012, small businesses may be in a much better business environment. Without forward thinking, it will be difficult to position small businesses well to succeed as the economy continues to build strength. The psyche for the business owner is volatile and fragile at the moment. Why worry about something that “could” happen in the future when I am worried about payroll next week?During the downturn, employees were thankful to have a job. However, to retain their position employees were required to work harder, work longer hours, for less money, no or lower bonuses and in a declining work environment. The work force moral in large and small businesses is low at the current moment. Employees have stuck with their current employer because it is safe or the fear of moving, especially when unemployment was 10%.Employees will feel more confident to seek a better work environment as the economy improves. The employees may not move for compensation as a primarily motivation. The primary motivation might be a better work environment, including a positive work environment, philosophies which match their value system, and investment in their professional education.During 2011 through 2013 the US Federal Reserve believes the US economy will continue to recover and unemployment will decrease from the current 9% to 7%. With an improved economy and lower labor pool, a labor shortage of high quality employees is possible.Small businesses are heading towards a future of being caught off guard once again. As the economy improves the small business owner will be focused on prior problems and current sales instead on current problems and future sales. This is likely to result in employees finding new employment and catching the employer off guard. The small business owner will not want to face this challenge as their sales and business improve.A solution for small businesses is to take a look at the work environment they provide. Does the small business have the right team in place for current and future work load? What values and philosophies does your small business stand for? What changes can you make today to improve your team’s moral? A business owner can hire a coach or consultant to help with transitions or to conduct personality profiles to build a team which can work well together. I encourage you to take actions today to build a stronger team and business for your future.