April 16, 2021
Main Street Monday – Small Business Owners Struggle To Find Qualified Workers
“Main Street is doing better as state and local restrictions are eased, but finding qualified labor is a critical issue for small businesses nationwide,” says NFIB Chief Economist, Bill Dunkelberg. “Small business owners are competing with the pandemic and increased unemployment benefits that are keeping some workers out of the labor force. However, owners remain determined to hire workers and grow their business.”
According to NFIB’s most recent small business optimism report, main street businesses increased employment by 0.42 workers per firm on average over the past few months. However, 42% (seasonally adjusted) had job openings that they were unable to fill in the current period, 20 percentage points higher than NFIB’s 48-year historical average reading of 22%.
Overall, more than half of the small business owners polled reported hiring or trying to hire new employees in March. However, 91% found few or no “qualified” applicants for the positions they were trying to fill. 34% said that they required skilled workers (up 1 percentage point from February) and 19% said they have openings for unskilled labor (up 3 percentage points).
Owners, frustrated with the limited availability of qualified and willing workers, have begun raising compensation to compete against unemployment benefits. A net 28% of small business owners polled by NFIB said they increased compensation to incentivize qualified candidates. Additionally, a net 17% plan to raise compensation in the next three months.
“Small businesses are clearly hiring […] and would hire more if more qualified applicants showed up,” adds Dunkelberg. “ Still, total employment is about 7 million lower than in 2020 February.”