According to NFIB’s monthly jobs report, 57 percent of owners reported hiring or trying to hire in January, up two points. Of those hiring or trying to hire, 91 percent of owners reported few or no qualified applicants for the positions they were trying to fill. Twenty-seven percent of owners reported few qualified applicants for their open positions and 25 percent reported none.
“The labor shortage continues to be a major concern for small businesses in the New Year as nearly all owners trying to hire are reporting no or few qualified applicants,” said NFIB Chief Economist Bill Dunkelberg. “Small businesses’ sales opportunities are limited because of the staffing shortage but owners continue to make changes in business operations to compensate.”
State-specific data is not available, but NFIB State Director Rosemary Elebash said:
“The Alabama unemployment rate remains at record lows with the December rate at 2.8 percent. Hiring employees across all business entities remains a challenge for business owners. The lingering problem is the Alabama labor force participation rate of 56.8 percent, well below the national average of 62 percent. Forty-three percent of Alabamians ages 16-64 are not participating in the Alabama labor force. Our members are encouraged, however, that the Alabama Community College System along with numerous other workforce training programs are available for participants to learn a trade or skill.”
Forty-five percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up four points from December.
Small business owners’ plans to fill open positions remain elevated, with a seasonally adjusted net of 19 percent planning to create new jobs in the next three months, up two points from December but 13 points below its record-high reading of 32 reached in August 2021.
The percentage of owners reporting labor quality as their top business operating problem remains elevated at 24 percent. Labor costs reported as the single most important problem to business owners increased two points to 10 percent, historically among the highest readings in over 49 years.
Seasonally adjusted, a net 46 percent of owners reported raising compensation, up two points from December and just four points below the 49-year average record high set in January last year. A net 22 percent of owners plan to raise compensation in the next three months, down five points from December. This is a major concern of the Federal Reserve, as these increased costs are likely to be passed on in higher selling prices.
Thirty-six percent of owners have job openings for skilled workers and 17 percent have openings for unskilled labor.