May 25, 2021
SBA Hot Topic Tuesday – Small Business Job Openings Remain at Record High
“Small business owners are seeing a growth in sales but are stunted by not having enough workers,” says NFIB Chief Economist, Bill Dunkelberg. “Finding qualified employees remains the biggest challenge for small businesses and is slowing economic growth.”
According to NFIB’s most recent Small Business Economic Trends Report, main street businesses continued to see strong job growth throughout April as firms increased employment by an average of 0.31 workers per firm (a historically high rate). Nevertheless, 44% of small business owners have job openings that they have been unable to fill.
Overall, more than half (59%) of the small business owners polled reported hiring or trying to hire new employees in April. However, 92% found few or no “qualified” applicants for the positions they were trying to fill. Among those hiring, 37% said that they were trying to fill a position that requires skilled labor (up 3 percentage points from March) and 20% said they have openings for unskilled workers (up 1 percentage point).
Owners, frustrated with the limited availability of qualified and willing workers, have begun raising compensation to compete against unemployment benefits. A net 31% of small business owners polled by NFIB said they increased compensation to incentivize qualified candidates. Additionally, a net 20% plan to raise compensation in the next three months.
“Job creation has been steady for the past six months for small firms, not showing the volatility of the overall jobs report,” comments Dunkelburg. “So, at least for the next few months, growth in the economy and jobs will remain strong.”