According to NFIB’s October Jobs Report, small businesses are looking to hire employees as they reported a historically high level of job openings in October. Overall, 55% of owners reported hiring or trying to hire in October, down 1 point from September. Thirty-three percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, down 3 points from September’s report.
“The small business labor market is still recovering from the COVID-19 pandemic and the state and local regulations that further hindered small business operations,” said Bill Dunkelberg, NFIB Chief Economist. “The large increase in the number of unemployed has done little to help small businesses improve the quality of their applicants. Firms have more openings for skilled workers and are having trouble matching available workers with available jobs.”
Small businesses increased employment by 0.1 workers per firm on average over the past few months, an increase of 0.09 workers per firm from September. Up one point, 11% of owners reported increasing employment an average of 0.3 workers per firm, and 14% (down 2 points) reported reducing employment an average of 3.8 workers per firm (seasonally adjusted). A seasonally adjusted net 18% of owners are planning to create new jobs in the next 3 months, down 5 points from September but historically a very strong reading.
Finding qualified employees remains a problem for small businesses with 87% of those trying to hire reporting few or no “qualified” applicants for the positions they were trying to fill. Twenty-eight percent of owners reported few qualified applicants for their open positions and 20% reported none.
A net 23% of owners reported raising compensation (unchanged) and a net 18% plan to do so in the coming months, up 2 points. Eight percent of owners cited labor costs as their top business problem (down 1 point) but 21% said that labor quality was their top business concern, exceeding taxes, regulations, and weak sales.
Twenty-nine percent of owners reported opening for skilled workers (down 3 points) and 14% have job openings for unskilled labor (down 2 points). Forty-four percent of the job openings in the construction industry are for skilled workers. Fifty-eight percent of construction firms reported few or no qualified applicants for their job openings and 35% cited the shortage of qualified labor as their top business problem.