The National Federation of Independent Business (NFIB) has released a new jobs report, revealing that small business owners continue to face significant challenges in finding workers. A staggering 45% (seasonally adjusted) of all owners have reported job openings they could not fill during the current period, a figure that exceeds the 49-year historical average of 23%. The labor market has become a major issue for small business owners, with 92% of those hiring or attempting to hire reporting few or no qualified applications for their available positions.
NFIB Chief Economist Bill Dunkelberg expressed concern over the situation, stating, “The labor market continues to be a big challenge for small business owners. More owners are raising compensation to compete, but labor quality remains a serious problem for owners.”
This sentiment is reflected in the report, which shows that 60% of small business owners attempted to hire in April. However, 29% of these owners encountered few qualified applicants, while 26% received none.
The percentage of small business owners who identify labor quality as their top operating problem has risen to 24%, an increase of one point since March. Meanwhile, labor costs as the most important problem for business owners have dropped by two points to 9%, just four points below the highest reading of 13% in December 2021.
Despite these challenges, small business owners’ plans to fill open positions remain strong. A seasonally adjusted net 17% are planning to create new jobs within the next three months, up two points from March. However, this figure is still 15 points below the record high reading of 32% in August 2021.
In response to the ongoing labor shortage, a net 40% (seasonally adjusted) of small business owners have increased compensation, although this is down two points from March and 10 points below the 49-year record high set in January of the previous year. Additionally, a net 21% plan to raise compensation in the coming three months, down one point from March.
The report also highlights the types of positions small business owners are struggling to fill. Thirty-seven percent of owners have openings for skilled workers, and 19% have openings for unskilled labor. As the labor shortage persists, small business owners must adapt and develop creative strategies to attract and retain qualified workers, which may include offering competitive compensation packages, providing opportunities for professional development, and promoting a positive work environment.
The NFIB Jobs Report underscores the pressing issue of labor shortages and unfilled job openings faced by small business owners across the country. As these challenges persist, it is crucial for small business owners to continue exploring innovative solutions to attract and retain skilled workers, ensuring the sustainability and growth of their businesses in a competitive market.
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