Small Businesses’ Plans to Increase Compensation Reaches Highest Level in Nearly 30 Years

Date: February 01, 2018

Shortage of qualified workers emerges as top issue, according to NFIB Jobs Report

Washington, D.C. (February 1, 2018) – Small business plans to increase compensation reaches highest level since 1989 as shortage of qualified workers becomes the biggest concern for business owners, according to the National Federation of Independent Business (NFIB) monthly Jobs Report.

“Small business owners are very optimistic and ready to hire new employees and raise wages, but finding qualified workers is an increasing challenge, rising to the top of their concerns,” said NFIB President and CEO Juanita Duggan.

Twenty-two percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem, exceeding the percentage citing taxes or the cost of regulation as their top business problem. Small business owners are trying to solve the labor shortage problem by raising wages, as a net 24 percent plan to raise worker compensation, the highest reading since December 1989. A net 31 percent reported raising compensation to attract or retain employees, which is the highest reading since December 2000.

“Since 2013, taxes and regulations have been the top two issues for small business, and Washington delivered relief from regulations and taxes in 2017,” Duggan said. “Businesses are now looking for qualified workers as they plan to expand,” Duggan said. 

Job creation was solid in the small-business sector as owners reported a seasonally adjusted average employment change per firm of 0.23 workers, a strong showing.

A seasonally adjusted net 20 percent plan to create new jobs, unchanged from December and historically strong. Hiring plans were strongest in construction, manufacturing, transportation, communication, and professional services.

“Small firms are hiring and paying at levels rarely seen in the history of NFIB’s surveys,” said NFIB Chief Economist Bill Dunkelberg. “Only an increase in the labor force and an increase in the participation rate can provide relief from the impact of labor shortages.”

Click here to view the entire NFIB Jobs Report. For more information about NFIB, please visit www.nfib.com.

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