October 19, 2020
Main Street Monday — 23% of Small Businesses Plan on Hiring in the Next Three Months
“[Business] plans are back to levels observed in the first quarter when the economy was busy extending the longest expansion in history,” says NFIB Chief Economist, William C.
Dunkelberg. “Owners are now anticipating that the U.S. economy will continue to grow, and that they will need employees to produce and deliver the goods.”
According to the most recent NFIB Small Business Optimism Report, 9 out of 10 of NFIB’s index components improved last month, with the greatest improvement in the labor market.
The report states a seasonally-adjusted net 23% of small business owners plan to create new jobs in the next three months, up 2 points from August, and 22 percentage points above April’s reading. However, 36% of those owners who reported having job openings say that they do not expect to be able to fill those positions in the current period.
89% of the small business owners who indicated their intent to hire new employees in the next three months report few or no “qualified” applicants for the positions they were trying to fill (up 4 points from August). 32% say they are looking to fill positions that require skilled workers (up 1 point from August) and 16% say that they are looking for unskilled laborers (up 4 points from the previous reading).
As the economy improves, a seasonally adjusted net 23% of small businesses have had to increase compensation in order to keep their current employees and entice new ones. However, 9% of small business owners now say that their top business problem going into the new fiscal year will be labor costs. Despite growing concerns surrounding labor costs, NFIB reports that small business optimism has returned to pre-COVID numbers and continues to increase.