A record percentage of small firms have unfilled jobs, the July jobs report released Thursday by the National Federation of Independent Businesses (NFIB) shows.
“The July jobs report shows the magnitude of small businesses that are growing and hiring at record levels, creating new jobs and opportunities for the workforce, and offering employees higher compensation,” NFIB President and CEO Juanita D. Duggan said, announcing the results.
Business owners consider the current labor shortage their greatest problem, the report says:
“Twenty-three percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem (up 2 points), 1 point below the record high set in May 2000. “
“Thirty-seven percent of all owners reported job openings they could not fill in the current period, up 1 point and a new survey record high. Thirteen percent reported using temporary workers, up one point.”
The labor markets for both skilled and unskilled workers are extremely tight, prompting employers to raise wages:
“Reports of higher worker compensation increased 1 point from June to a net 32 percent of all firms. Plans to raise compensation also rose 1 point to a net 22 percent, just 2 points below its recent peak of 24 percent in January.”
Thirteen percent reporting using temporary workers to shore up their staffs, up one point from June.
Still, small business owners added the largest number of workers per firm since 2006 in July, adding a net 0.37 workers per firm on average, almost double June’s rate.
These results bode well for the U.S. economy, if the labor shortage can be effectively addressed, the report concludes:
“Record job openings suggest the economy has the potential to keep up its growth pace over the next few quarters if the ‘staffing problem’ can be resolved or mitigated.”
The NFIB Research Foundation has collected Small Business Economic Trends data with quarterly surveys since 1974 and monthly surveys since 1986. July survey respondents are based on a random sample of 1,718 of NFIB’s 10,000 members through July 30, 2018.