A new national report from the National Federation of Independent Business (NFIB) reveals that 36 percent of small business owners had job openings they couldn’t fill in June, a two-point increase from May, signaling persistent hiring challenges despite a broader slowdown in the labor market.
“Despite the slowing labor market, many small business owners are still looking to attract applicants and hire for their open positions,” said NFIB Chief Economist Bill Dunkelberg. “Compensation pressures remain strong for those owners who are competing to retain and attract talent in their business.”
The June survey found that 58 percent of small business owners nationwide reported hiring or trying to hire last month, up three points from May. Among those, 86 percent said they received few or no qualified applicants. Specifically, 25 percent reported receiving few qualified applicants, while another 25 percent said they received none.
The need for skilled workers remains high, with 30 percent of business owners reporting openings for skilled labor — a figure that has not changed — and 13 percent reporting openings for unskilled labor, unchanged for the fifth consecutive month. Job openings were most prevalent in the construction, manufacturing, and transportation sectors, while the finance and agriculture industries reported the fewest openings.
NFIB State Director Rosemary Elebash said that while state-specific data was unavailable, the overall trend highlights a critical issue for Alabama and other states. “The lack of qualified workers just underscores the need for state officials to continue their efforts to improve workforce training and development. Without good workers and enough workers, owners can’t grow their businesses,” Elebash said.
Labor quality continues to be a top concern. Sixteen percent of business owners cited labor quality as their most significant operating problem — unchanged from May — while 10 percent cited labor costs as their primary challenge, a one-point increase from the previous month.
In response to hiring pressures, more small business owners are raising pay. A seasonally adjusted net 33 percent reported increasing compensation in June — up seven points from May and marking the largest monthly increase since January 2020. However, fewer plan to raise pay in the coming months, with a net 19 percent indicating they expect to do so, down one point from May.
Looking ahead, a seasonally adjusted net 13 percent of small business owners plan to create new jobs in the next three months, a modest one-point increase from May.
