A new report from the National Federation of Independent Business (NFIB) reveals that small businesses are struggling to fill job openings despite a surge in job opportunities. The report, called the NFIB Jobs Report, highlights the ongoing challenge faced by small business owners in recruiting and retaining qualified employees.
According to Bill Dunkelberg, Chief Economist at NFIB, "Owners continue to raise compensation to attract the right employees." This indicates that small business owners are willing to increase wages in order to attract skilled workers.
The report, based on a survey of 582 NFIB member firms conducted until September 28th, shows a significant increase in job openings, particularly unfilled positions. A striking 43% of all owners disclosed unfilled job openings, which is a 3-point increase from August. This rise in job openings comes despite consistently low unemployment rates since the Federal Reserve tightened its policy in March 2022.
The report also provides insights into the types of job openings in small businesses. Openings for skilled workers increased by 2 points, reaching 37%, while unskilled labor openings remained at 18%. However, when it comes to actual employment changes, only 10.8% of firms reported an increase in employment, while 12.2% reported a decrease. This suggests that although there is a desire to hire, there hasn't been significant growth in net employment among small businesses.
Labor concerns continue to be a top issue for small business owners. The report shows that 23% of small business owners mentioned labor quality as their primary operational issue, slightly down from 24% in August. Additionally, 9% highlighted labor costs as their main business worry, a figure that is below the high of 13% in December 2021.
The report also highlights industry-specific job openings. The construction industry has the highest number of unfilled positions at 62%, followed by retail at 48%, manufacturing at 44%, and services at 43%. Despite the high number of job openings, many small business owners are facing challenges in finding qualified applicants. 57% of firms that either hired or aimed to hire in September stated that they received limited or no qualified applications.
In response to the labor shortage, 36% of businesses have raised their compensation offerings, and 23% anticipate doing so in the next quarter. This demonstrates that small business owners are willing to increase wages in order to attract and retain qualified employees.
Looking ahead, the labor market is expected to remain stable for small businesses on Main Street. However, as we enter the last quarter of the year, a surge in layoffs is anticipated, which could lead to a decline in unfilled job positions. As a result, fewer business owners may feel the need to raise worker compensation.
Overall, the NFIB Jobs Report highlights the ongoing challenges faced by small business owners in hiring and retaining qualified employees. Despite a surge in job openings, many small businesses are struggling to find qualified applicants, leading to increased compensation offerings in order to attract the right employees.
