According to the NFIB Monthly Jobs Report, small business owners continued to face challenges in hiring qualified employees for their open positions in June. NFIB Chief Economist Bill Dunkelberg highlighted that the number of small businesses with one or more job openings they cannot fill remains exceptionally high. To address this, owners are increasing compensation at historically high levels to attract and retain employees.
A seasonally adjusted net 15% of owners plan to create new jobs in the next three months, unchanged from May. Overall, 60% of owners reported hiring or trying to hire in June. Of those hiring or attempting to hire, 85% reported few or no qualified applicants for their open positions, with 31% citing few qualified applicants and 20% reporting none.
The report noted a slight decrease in the percentage of small business owners identifying labor quality as their top operating problem, which fell one point to 19%. Conversely, labor costs as the single most important problem rose by one point to 11%, just below the highest reading of 13% recorded in December 2021.
In terms of compensation, a seasonally adjusted net 38% of owners reported raising compensation, up one point from May and historically very high. Additionally, a net 22% of owners plan to increase compensation in the next three months, up four points from May.
Job openings for skilled workers decreased by six points to 31%, while openings for unskilled labor increased by two points to 16%. Job openings in the construction sector were down three points from the previous month, with over half (51%) of firms in the sector unable to fill these positions. The highest number of job openings were reported in the construction, transportation, and retail sectors, whereas the agriculture and finance sectors reported the fewest openings.
The NFIB report also provided insights into job openings across various industries. In the manufacturing sector, 58% of firms reported hiring or trying to hire, with 93% reporting few or no qualified applicants. In the retail sector, 49% of firms were hiring, with 86% experiencing difficulty in finding qualified applicants. Additionally, in the services sector, 57% of firms were hiring, with 83% facing challenges in finding qualified workers.
Moreover, the report highlighted that 35% of owners had job openings for skilled workers and 18% had openings for unskilled labor. In the wholesale sector, 43% of firms were hiring, with 87% reporting few or no qualified applicants. In the construction sector, 60% of firms were hiring, with 90% facing a shortage of qualified applicants. Transportation firms reported 59% hiring, with 85% having difficulty finding qualified workers.
The NFIB Monthly Jobs Report emphasizes the ongoing struggle of small business owners to find qualified employees, leading to increased compensation offers. This trend reflects the broader challenges in the labor market and the efforts of small businesses to remain competitive in attracting and retaining talent.
Image: Envato
Michael Guta is the Assistant Editor at Small Business Trends and has been with the team for 9 years. He currently manages its East African editorial team. Michael brings with him many years of content experience in the digital ecosystem covering a wide range of industries. He holds a B.S. in Information Communication Technology, with an emphasis in Technology Management.
