Washington, D.C. (Jan. 9, 2020) –Small business owners continued to hire employees, add new positions, and raise compensation in December, ending 2019 on a strong note, according to NFIB’s monthly jobs report. Job creation in December stayed the same from the previous month, with owners adding an average addition of 0.29 workers per firm, continuing at the highest level since May.
“2019 was a strong year for small businesses across the country,” said NFIB’s Chief Economist Bill Dunkelberg. “Because of regulatory and tax relief, owners were able to invest in their businesses and employees throughout the year.”
Finding qualified workers remained the top issue for owners in December, with 23% reporting it as their number one problem. Fifty-three percent reported hiring or trying to hire, but 94% of those owners reported few or no qualified applicants for the positions they were trying to fill.
Sixty-two percent of construction firms reported few or no qualified applicants and 46% cited the shortage of qualified labor as their top business problem. The manufacturing sector reported comparable figures with 63% and 24% respectively.
Down from last month, 33% (seasonally adjusted) of all owners reported job openings they could not fill in the current period. Sixty-one percent had job openings in construction.
“The inability to assemble work teams is a key contributor to the comparably lackluster performance of the construction industry as evidenced by the December figures,” said NFIB’s Chief Economist Bill Dunkelberg. “Owners are raising compensation in order to attract more qualified applicants to fill open positions.”
A historically high percentage of owners have raised and plan to raise worker compensation, with a net 29% reported raising compensation (seasonally adjusted) in the last three months and a net 24% plan to do so in the coming months. Seven percent of owners cited labor costs as their top problem.
Eleven percent of owners reported increasing employment an average of 2.3 workers per firm and 4% reported reducing employment an average of 2.3 workers per firm (seasonally adjusted).
A net seasonally adjusted 19% of owners plan to create new jobs, down 2 points from the previous month. Nineteen percent of owners plan to increase total employment at their firm and 5% plan reductions.
Twenty-seven percent have openings for skilled workers and 13% have openings for unskilled labor. Down from November, 28% of owners reported few or no qualified applicants for their open positions and 22% reported none, unchanged. Reports of few or no qualified applicants were high in manufacturing (63%), construction (62%), and retail (55%).