Nearly Half of Small Business Owners Raising Compensation in March

The labor shortage continues to be a major challenge for small businesses as owners compete for workers, according to the National Federation of Independent Business’s (NFIB’s) monthly jobs report. Twenty-two percent of owners reported that labor quality was their top business problem, in second place behind inflation. Eight percent of owners cited labor costs as their top business problem, down three points from February. Small businesses reporting labor costs as the top business problem is at 48-year record high levels.

“The labor shortage has not eased on Main Street as the number of job openings exceeds the number of unemployed workers,” said Bill Dunkelberg, NFIB chief economist. “Owners have continued to increase their compensation in March to attract the right employees for their open positions, however, these rising labor costs will be passed on to their consumers through higher selling prices.”

A net 49 percent (seasonally adjusted) of owners reported raising compensation, up four points from February. A net 28 percent plan to raise compensation in the next three months, up two points from February.

Seasonally adjusted, 47 percent of all small business owners reported job openings they could not fill in the current period, down one point from February. Thirty-nine percent of owners have openings for skilled workers and 23 percent have openings for unskilled workers. A seasonally adjusted net 20 percent are planning to create new jobs in the next three months.

Overall, 60 percent of owners reported hiring or trying to hire in March. Ninety-two percent of those hiring or trying to hire reported few or no qualified applicants for the positions they were trying to fill. Thirty-two percent of owners reported few qualified applicants for their open positions and 23 percent reported none.

Sixty-two percent of construction firms reported few or no qualified applicants, one of the tightest domestic labor markets in recent history.

Leave a Reply

Your email address will not be published. Required fields are marked *