Labor quality and costs remain major issues for small businesses
NFIB’s monthly jobs report released last week shows the labor shortage continues to be a challenge for small businesses with 51% of owners reporting job openings they could not fill in the current period, up four points from April and equal to the 48-year record high set in September 2021.
“The labor force participation rate is slowly rising but small businesses continue to have a hard time filling their open positions,” said NFIB Chief Economist Bill Dunkelberg. “The number of job openings continues to exceed the number of unemployed workers which has produced a tight labor market and added pressure on wage levels.”
Key findings include:
- Twenty-three percent of owners reported labor quality was their top business problem, the second-most common issue after inflation, while 12 percent of owners cited labor costs.
- A total of 67% of owners reported hiring or trying to hire in May, up eight points from April. The vast majority (92%) of those trying to hire reported few or no qualified applicants.
- A net 49% of owners reported raising compensation, up three points from April and only one point below the 48-year record high from January. In addition, a net 25% of owners plan to raise compensation soon.
- A net 26% of owners are planning to create new jobs in the next three months, up six points from April and nearly a new record high.
- Forty-two percent of owners have openings for skilled workers and 25% have openings for unskilled labor. Construction reports an extremely tight labor market, with sixty-five percent of the job openings for skilled workers, an increase of 11 points. Sixty-nine percent of construction firms reported few or no qualified applicants, up five points from April.
You can read the full Jobs Report here.
Take Action: If you own a small business and new taxes and mandates would hurt its economic recovery, tell your U.S. Senators and Representative to vote no on any tax increases or new mandates.