After the economic disaster that started last spring when the COVID-19 pandemic forced businesses to close for several weeks, the National Federation of Independent Business March report shows a record number of small-business owners surveyed can’t find qualified candidates to fill jobs.
“According to NFIB’s monthly jobs report, 42% (seasonally adjusted) of small-business owners reported job openings they could not fill in the current period, a record reading,” according to the NFIB. The March reading is 20 points higher than the 48-year historical average of 22%, it says.
“Where small businesses do have open positions, labor quality remains a significant problem for owners nationwide,” NFIB Chief Economist Bill Dunkelberg said in an April 2 news release. “Small-business owners are raising compensation to attract the right employees. It is important that lawmakers focus on policies that will help strengthen job growth and not deter the small business recovery.”
Barbara Quandt, NFIB state director in Indiana, said it’s ironic that owners are having this problem after the effects of the past year on employment.
“Our small-business owners create jobs that lead not only Indiana, but the nation out of recessions. It’s impossible to grow when you can’t find qualified employees and without those qualified employees, the state and nation’s recovery will be stifled.”
According to the NFIB:
• Overall, job growth continued in March with firms increasing employment by 0.42 workers per firm on average over the past few months.
• Fifty-six percent of owners reported hiring or trying to hire in March, unchanged from February.
• Owners have plans to fill open positions with a net 22% (seasonally adjusted) planning to create new jobs in the next three months, 11 points above the 48-year historical average.
• Thirty-four percent of owners have openings for skilled workers and 19% have openings for unskilled labor.
• In the construction industry, 50% of the job openings are for skilled workers. Fifty-five percent of construction firms reported few or no qualified applicants (down six points) and 38% cited the shortage of qualified labor as their top business problem (up three points).
Finding qualified employees remains a problem for small business owners. Ninety-one percent of those owners trying to hire reported few or no “qualified” applicants for the positions they were trying to fill in March. Twenty-eight percent of owners reported few qualified applicants for their open positions and 23% reported none.
• A net 28% (seasonally adjusted) of owners reported raising compensation, up 3 points from February and the highest level in the past 12 months. A net 17% plan to raise compensation in the next three months, down two points.
• Seven percent of owners cited labor costs as their top business problem and 24% said that labor quality was their top business problem and the top overall concern.
The survey results are based on 514 respondents to the March survey of a random sample of NFIB’s member firms, surveyed through March 30.