Small Business Labor Shortage Hits New Record in July

NFIB

Small business owners reported a record high reading of unfilled job openings with 49% of owners reporting job openings they could not fill in July, according to NFIB’s monthly jobs report. Unfilled job openings have remained far above the 48-year historical average of 22%.

“Small business owners struggled to find qualified workers for their open positions, which has impaired business activity in the busy summer months,” said NFIB Chief Economist Bill Dunkelberg. “Owners are raising compensation to the highest levels in 48 years to attract needed employees.”

Overall, 61% of owners reported hiring or trying to hire in July, up two points from June. A seasonally adjusted net 27% of owners are planning to create new jobs in the next three months, down one point from June’s record high reading.

Finding qualified workers remains a problem for small business owners. Ninety-three percent of those owners hiring or trying to hire reported few or no “qualified” applicants for the positions they were trying to fill in July. Thirty-one percent of owners reported few qualified applicants for their open positions (down one point) and 26% reported none (up two points), a 48-year record high.

Seasonally adjusted, a net 38% reported raising compensation, down one point from June’s record high of 39%. A net 27% of owners plan to raise compensation in the next three months, up one point from June and a 48-year record high reading.

Nine percent of owners cited labor costs as their top business problem and 26% said that labor quality was their top business problem, unchanged from June but remains the top overall concern.

Forty-three percent of owners have job openings for skilled workers (up three points) and 25% have openings for unskilled workers (up three points). In the construction industry, 59% of the job openings are for skilled workers. Sixty-six percent of construction firms reported few or no qualified applicants for their open positions.

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