Labor quality and costs continue to be top business problems
Worker shortages and labor costs remain a top problem for small businesses. According to NFIB’s monthly jobs report, 40% (seasonally adjusted) of small business owners reported job openings they could not fill in the current period, down two points from last month and the lowest level since February 2021.
Seasonally adjusted, a net 36% of owners reported raising compensation in August, tying June’s reading, and marking the lowest reading since May 2021. A net 26% of owners plan to raise compensation in the next three months, up five points from July.
“More small business owners are planning to increase compensation in the next three months as unfilled job openings slipped in August,” said Bill Dunkelberg, NFIB Chief Economist. “Even as openings fell on Main Street, owners are actively working to retain current employees and attract qualified applicants.”
The percentage of owners reporting labor quality as their top business operating problem remains elevated at 24%. Labor costs reported as the single most important problem to business owners decreased two points to 8%, five points below the highest reading of 13% reached in December 2021.
Small business owners’ plans to fill open positions remain elevated, with a seasonally adjusted net 17% planning to create new jobs in the next months, unchanged from July but 15 points below its record high reading of 32 reached in August 2021.
Overall, 59% of owners reported hiring or trying to hire in August, down two points from July. Of those hiring or trying to hire, 92% of owners reported few or no qualified applicants for the positions they were trying to fill, down two points from July. Thirty-three percent of owners reported few qualified applicants for their open positions and 21% reported none.
Thirty-five percent of small business owners have job openings for skilled workers and 18% have openings for unskilled labor.
When asked about the overall change in employment at their business, 12.8% reported higher and 12.4% reported lower, a fairly flat performance. All industries reported fewer job openings compared to last month except for services (up one point) and professional services (up one point).
The entire NFIB Jobs report is available for further analysis.