Open Positions, Labor Quality Continue to Plague Small Businesses, Says Jobs Report

NFIB

Small business owners continue to attempt to fill historically high levels of open positions, according to NFIB’s monthly jobs report. Twenty-three percent of owners said that labor quality was their top business problem, up one point from last month and in second place behind inflation. Eight percent of owners cited labor costs as their top business problem. Reports of labor costs as the top business problem are at 48-year record high levels, just five points below the record set in December 2021.

“The labor force participation rate is slowly rising, which is good news for small businesses looking for workers,” said Bill Dunkelberg, NFIB Chief Economist. “While wage gains have been good, inflation has outpaced it, reducing real disposable income. Small employers continue to raise wages and make business adjustments to attract qualified employees.”

Seasonally adjusted, a net 46% of owners reported raising compensation, down three points from March. A net 27% of owners plan to raise compensation in the next three months, down one point from March. Both actual and planned compensation changes eased in March but remain near record high levels.

Forty-seven percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period. Forty percent of owners have openings for skilled workers and 22% have openings for unskilled labor.

In the construction industry, 54% of the job openings are for skilled workers, down seven points. Sixty-four percent of construction firms reported few or no qualified applicants, demonstrating one of the tightest domestic labor markets in recent history.

Small business owners’ plans to fill open positions remain elevated, with a seasonally adjusted net 20% planning to create new jobs in the next three months. Of those owners hiring or trying to hire, 93% of owners reported few or no qualified applicants for the positions they were trying to fill. Thirty percent of owners reported few qualified applicants for their open positions and 25% reported none.

Click here to view the full NFIB jobs report.

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