Small Business Toolkit: Advantages and Benefits for Small Businesses
Explore the many advantages and benefits people with disabilities bring to the small business workforce.
A Wider Talent Pool
Small businesses compete for workers to fill the historically high number of job openings. By hiring people with disabilities, small businesses can access an often-underutilized talent pool of skilled, resourceful, adaptable, and highly motivated candidates.
97% of HR professionals said that employees with disabilities regularly perform the same or better than their peers without disabilities.
Source: Society for Human Resource Management (SHRM) member survey
A Competitive Edge
Employing people with disabilities will help small businesses stand out from their competition and connect to a strong and sizable customer base. Disabled people represent a large market segment in the U.S. By employing them, managers gain a better understanding of how to meet the needs of these valuable customers.
Expand Business Reach
Research from the Harvard Business Review finds that “Disabilities often confer unique talents that make people better at particular jobs.” This happens because employees with disabilities can use their lived experiences as a lens to improve products, enhance services, and increase efficiency. By hiring and promoting people with disabilities, small businesses build brand loyalty with disabled consumers and their families and friends.
Economic Benefits
The Work Institute reports that the financial burden to replace an employee is estimated at 33% of their base wages. For instance, to replace an employee who earns $50,000 annually could cost at least $16,500 and higher salaries drive these costs even further.
Source: The Work Institute's 2025 Retention Report (PDF)
Financial Incentives
Beyond apparent cost savings, several financial incentives are available to small businesses that hire disabled employees.
Federal and State Tax Incentives: An employer that hires a new employee from a specific target group may be eligible for the Federal Work Opportunity Tax Credit (WOTC) and state incentives. You can learn more about the WOTC from the Internal Revenue Service (IRS). People with disabilities are part of these target groups, including Vocational Rehabilitation (VR) referrals, Supplemental Security Income (SSI) recipients, and Qualified Veterans. You can work with a knowledgeable tax professional or your local American Job Center to learn about your eligibility for these incentives. Businesses can claim up to a $2,400 credit under WOTC for each employee hired.
Workforce Innovation and Opportunity Act of 2014 (WIOA): WIOA is federal legislation that provides funding and resources to support workforce development programs and services. Businesses can partner with workforce agencies receiving WIOA funding (PDF) to improve talent pipelines and promote opportunities for individuals with disabilities. Learn more about these opportunities, including where to find candidates seeking employment through WIOA-funded organizations that hire them.
Registered Apprenticeship Programs (RAP): RAPs are structured training programs leading to long-term career pathways. They are regulated and overseen by the U.S. Department of Labor or state apprentice offices but are sponsored by individual employers or employer intermediaries in a wide range of industries. Employers who sponsor RAPs may be eligible to receive certain financial supports and tax credits; tuition support may also be available to program candidates. Choose your state to learn more or read about the value of apprenticeship with respect to attracting and retaining workers with disabilities.
Federal Grants: Small businesses can apply for grants which will help them to apply for and secure federal contracts. These grants can provide financial support, incentives, resources, and partnerships to facilitate hiring people with disabilities.
Federal Contractors
The U.S. Federal Government is the largest purchaser of goods and services in the world. It is also committed to ensuring it allocates at least 23% of its contracting dollars to small businesses. In addition, the Federal Government endeavors to award a certain percentage of all federal prime contracting dollars to small businesses that meet certain criteria.
A small business that works to hire and retain people with disabilities has a competitive advantage, because it is better positioned as a contractor to meet the federal government’s requirements and disability utilization goals.
Federal contractors and subcontractors with contracts over a certain dollar threshold cannot discriminate against job applicants or employees on the basis of disability or status as a protected veteran, a category that includes disabled veterans. The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) enforces these requirements. For certain federal contractors, OFCCP has established a utilization goal under Section 503 of the Rehabilitation Act of 1973 for “qualified individuals with disabilities” to comprise 7% of a contractor’s workforce (either as a whole or within each job group, as relevant).