- Record share of small business owners report challenges in hiring workers for the fourth straight month in a National Federation of Independent Business poll
- Forty-eight percent of respondents in May say they have been unable to fill job openings
- More businesses plan to ramp up hiring efforts, with a majority expecting to increase their wages
Summary by Dirk Langeveld
A recent report from the National Federation of Independent Business is highlighting the challenges small business owners are encountering in hiring workers. For the fourth straight month, the share of survey respondents in NFIB’s monthly jobs report who said they were unable to fill available positions hit a record high.
Forty-eight percent of respondents in the May report said they were unable to fill job openings, up from 44 percent in April. The issue was most pronounced among companies seeking skilled workers, with 40 percent saying they had unfilled openings – up three points from April. Twenty-seven percent of respondents said they had openings for unskilled workers, an increase of six points from April.
Sixty-one percent said they hired or planned to hire new workers in May, up two points from the previous month. However, 93 percent of these respondents said they had received few if any qualified applicants for their openings.
Labor quality remained the problem most commonly cited by small business owners. Twenty-six percent said this was their biggest concern, an increase of two points.
More businesses were planning to ramp up hiring efforts in the next three months. Twenty-seven percent said they planned to create new jobs in the next three months, up from just 6 percent in April. A net share of 56 percent said they have raised compensation or planned to do so in order to attract applicants, an increase of five points.
The lifting of business restrictions and ongoing COVID-19 vaccination efforts have been fueling economic growth this spring, but many businesses have also been grappling with labor shortages. Job growth was considerably lower than expected in April, and also fell below expectations in May.
A $300-a-week supplemental unemployment benefit established to assist people who found themselves jobless during the COVID-19 pandemic has come under sharp criticism by many Republicans, who say it is providing a disincentive for workers who might otherwise seek a job. All but two Republican-led states are withdrawing from the supplemental unemployment insurance program early. Connecticut is retaining the supplemental benefits, which are set to expire in September, but has restored a work search requirement for unemployment claimants.
Several factors have also been cited for the disconnect between elevated unemployment and employer difficulties in finding workers. These include child care challenges, concerns about jobs with a higher risk of COVID-19 infection, lack of skills or training, and dissatisfaction with the pay and benefits offered.
