Inflation, labor quality are top problems for owners
(TRENTON, NJ) – The labor shortage continues to be a major challenge for small businesses as owners compete for workers, according to NFIB’s monthly jobs report. Twenty-two percent of owners reported that labor quality was their top business problem, in second place behind inflation. Eight percent of owners cited labor costs as their top business problem, down three points from February. Small businesses reporting labor costs as the top business problem is at 48-year record high levels.
“The labor shortage has not eased on Main Street as the number of job openings exceeds the number of unemployed workers,” said Bill Dunkelberg, NFIB Chief Economist. “Owners have continued to increase their compensation in March to attract the right employees for their open positions, however, these rising labor costs will be passed on to their consumers through higher selling prices.”
“New Jersey small business owners remain pessimistic as labor quality and shortages are causing unprecedented challenges. Increasing compensation is a necessary reality, but sadly the only alternative for Main Street businesses is to pass the increasing costs onto customers,” said Eileen Kean, NFIB State Director.
A net 49% (seasonally adjusted) of owners reported raising compensation, up four points from February. A net 28% plan to raise compensation in the next three months, up two points from February.
Seasonally adjusted, 47% of all small business owners reported job openings they could not fill in the current period, down one point from February. Thirty-nine percent of owners have openings for skilled workers and 23% have openings for unskilled workers. A seasonally adjusted net 20% are planning to create new jobs in the next three months.
Overall, 60% of owners reported hiring or trying to hire in March. Ninety-two percent of those hiring or trying to hire reported few or no qualified applicants for the positions they were trying to fill. Thirty-two percent of owners reported few qualified applicants for their open positions and 23% reported none.
Sixty-two percent of construction firms reported few or no qualified applicants, one of the tightest domestic labor markets in recent history.