New Report Highlights Ongoing Employment Challenges for Small Businesses
A recent national report from the National Federation of Independent Businesses (NFIB) indicates that 36% of small business owners were unable to fill job openings in June, a slight increase from May. This suggests persistent employment difficulties, even as the overall labor market is experiencing a slowdown.
“Despite the slowing job market, many small business owners are actively trying to hire for available positions,” commented Bill Dunkilberg, NFIB’s chief economist. “There’s considerable pressure to offer competitive rewards as they strive to attract and retain talented individuals.”
According to a June survey, 58% of small business owners reported attempting to hire, which is three percentage points higher than in May. Of those, 86% found that they had received few or no qualified applicants. Specifically, 25% noted a scarcity of eligible applicants, while another 25% stated they hadn’t received any at all.
The demand for skilled workers remains significant, with 30% of employers indicating openings in skilled labor—consistent with previous data. Additionally, 13% reported unskilled labor openings, a trend that has not changed for five years. The highest recruitment activity was seen in the construction, manufacturing, and transportation sectors, whereas the financial and agricultural industries lagged behind.
NFIB Director Rosemary Elebash mentioned that while state-specific data isn’t available, the trends are critical for Alabama and other states. “The shortage of qualified workers highlights the urgent need for state officials to enhance workforce training and development. Without a capable workforce, business growth is hindered,” Elebash noted.
The quality of labor remains a significant concern for employers. Sixteen percent identified labor quality as their top operational issue since May, while 10% pointed to labor costs, which rose by one percentage point compared to the previous month.
In response to ongoing pressure, more small business owners are raising wages. A seasonally adjusted net of 33% reported pay increases in June, which marks a notable rise of seven points since May. However, plans for future wage increases appear to be waning, with only 19% anticipating raises, down one percentage point from May.
Looking ahead, 13% of small business owners plan to create new jobs in the next three months, according to seasonally adjusted net data.
