Washington, D.C. (Dec. 5, 2019) – Thirty percent of small business owners reported raising compensation and 26% plan to do so in the coming months, the highest level since December 1989, according to NFIB’s monthly jobs report. Owners are adding an average addition of 0.29 workers per firm in November, which is the highest level since May. However, finding qualified workers has remained the top issue with 26% of owners reporting it as their No. 1 problem.
“Despite a tight labor market, small business owners are doing exactly what they said they would do thanks to tax relief. They’re creating new jobs and raising compensation at record levels,” said NFIB President & CEO Juanita D. Duggan. “The only thing holding them back continues to be finding qualified workers, but in spite of that challenge the small business economy is roaring.”
Up from last month, 61% reported hiring or trying to hire and 88% of those reported few or no qualified applicants for the job. Thirty-eight percent of all owners reported job openings they could not fill in the current period. In transportation, 50% of owners had job openings, 48% in construction and manufacturing.
A seasonally adjusted net 21% plan to create new jobs, up 3 points from last month. Nineteen percent of owners plan to increase total employment at their firm, and 5% plan reductions. Twenty-two percent of owners in construction plan to increase their employment, and 5% plan reductions.
Ten percent of owners cited labor costs as their top problem, 1 point below the record high level reached in September. In the retail sector, 18% reported labor costs as their main issue, a record for the industry.
“The labor shortage continues to hinder the productivity of small businesses,” said NFIB’s Chief Economist Bill Dunkelberg. “The retail industry is facing compensation pressures due to labor shortages, but also higher minimum wage laws in many parts and wage competition with large firms.”
Thirty-one percent of owners have openings for skilled workers and 15% have openings for unskilled labor. Down from last month, 31% of owners reported few qualified applicants for their open positions and 22% reported none (up 1 point). Reports of “few or no qualified applicants” were high in construction (67%), manufacturing (57%), and retail (54%).