American small business must mobilize now for the coming labor shortage that will significantly affect successful business operations.

Nationally, independent small businesses employ about half of the private sector work force. Small businesses are the major employers of the following labor segments based upon 1988 data:Younger workers, ages 16-24 - 19.2 percent

Older workers, ages 65 and over - 2.1 percent

Women - 44 percent

Historically, small business has had difficulty in competing against large business to attract a well-trained and educated work force. It has turned to labor segments often neglected by large business and spent considerable time and money in building a qualified work force. However, throughout the remainder of this decade and well into the foreseeable future, these employment segments will be under intensified demand by large and small business.

In this decade, 14 to 15 million jobs will be created. This will outstrip the growth rate of the nation's work force, growing at a rate less than 1 percent per year. This is the slowest growth rate of the national work force since the 1930s.

With this increased demand for a limited labor force, small business must consider ways of providing quality employment. One of the keys to providing this quality is in offering employee benefits such as health insurance, retirement benefits, paid leave. The difficulty of these benefits to the small-business owner is, of course, their cost. Most small business owners simply cannot afford the burden of all these expenses.

Health insurance is a boiling issue. As many as three-fourths of Americans without health insurance are employed by small businesses. Nationally, 94.5 percent of large businesses offer group health insurance. Yet, only 51.2 percent of small businesses (employing less than 24 employees) offer such plans. Health plan costs are greatly higher for small businesses than they are for large. This is due to the limited number of employees to share in the group health risk. National data shows that health care costs are continuing to escalate for both small and large businesses. And as the work force continues to age, the cost of insurance will continue to escalate.

Retirement benefits are a vital part of an employment benefits package in a business's ability to attract and retain employees. In fact, as the work force ages and grows more slowly, a good retirement plan is essential.

Nationally, 81.5 percent of large businesses provide some type of retirement or pension plan, compared with only 18.7 percent of small businesses (with less than 24 employees) who provide retirement or pension plans.

Paid leave is the most common type of benefits offered by either small or large businesses. More than 90 percent of firms with more than 15 employees and nearly 80 percent of even the smallest firms with fewer than 15 employees have some kind of disability leave policy.

The key to attracting and retaining quality employees now and in the future for small business is recognizing the need to offer a reasonable benefits program. With the increased competition for the work force, today's entrepreneurs can no longer ignore employee benefits. The costs associated with these benefits have been viewed as discretionary in the past, but now have become essential expenses to businesses of all sizes.

R. Kent Moon is senior vice president of Zions First National Bank's Small Business and Entrepreneurial Department.