Owners are creating new jobs and willing to invest in training for employees
Washington, D.C. (May 2, 2019) – Small businesses continue to be a critical strength for the economy, with a seasonally-adjusted net 20 percent of owners reporting they are planning to create new jobs, according to NFIB’s monthly jobs report, released today. In April, 31 percent of small business owners plan to increase employment and three percent are planning reductions. With few owners reducing employment, there’s an indication that the initial claims for unemployment will remain historically low.
“Small businesses continue to be the driving force behind the country’s strong economy, but they’re facing significant barriers in finding workers at near record levels,” said NFIB’s President and CEO Juanita D. Duggan. “A constant is that small businesses are creating new jobs and raising wages for the American workforce and have been for years.”
Small businesses added a net addition of 0.32 workers per firm, a slower pace than last quarter but a strong number. Unchanged from last month, 12 percent reported increasing employment an average of 3.0 workers per firm and five percent reported reducing employment an average of 2.9 workers per firm (seasonally adjusted). Thirteen percent of owners reported using temporary workers.
Owners continue to report they are increasing employee compensation at a solid rate. A net 34 percent reported higher compensation in April, with a net 20 percent planning increases in the next few months. Eight percent of owners cited labor costs as a top concern, unchanged from last month and only two points below the 45-year record high reading in February.
Fifty-seven percent reported hiring or trying to hire, but 86 percent of those hiring reported few or no qualified applicants for their open positions. While owners are creating new jobs and hiring at record levels, 24 percent cited the difficulty of finding qualified workers as their Single Most Important Business Problem, one point off the record high of 25 percent set in August of 2018. In construction, 39 percent cited it as their top problem, 32 percent cited it in manufacturing, and 15 percent cited it in professional services.
Down one point from the record high, 38 percent of all owners reported job openings they could not fill in the current period. In construction, 52 percent had openings, with 49 percent (94 percent of the openings) for skilled workers.
“The strength in hiring plans and the record-high levels of job openings is a positive indicator for economic growth,” said NFIB’s Chief Economist Bill Dunkelberg. “The wide-spread willingness of owners to increase employment indicates that they see an economy that will be solid enough to deliver a return on their investment in labor as well as new capital.”
According to NFIB’s recently released Employee Training survey, small business employers are investing a significant amount of time and resources in training and improving the skills of their employees. Owners reported that in-house training is the best way for new or existing employees to transition to a new role. However, one of the biggest challenges employers are facing is retaining those employees after investing the resource and time to train them.