MONTGOMERY, Ala. – Small business owners’ hiring and plans to hire fell slightly in August, according to the National Federation of Independent Business’ August jobs report.
Down 5 percentage points from July, 56% of owners hired or tried to hire employees last month. The slight downturn also applies to future expectations, as owners’ plans to increase employment in the next three months fell 3 points to 17% adjusted seasonally.
Finding and hiring qualified workers continues to be a problem in the small business landscape, according to the report.
Though owners’ reports of labor quality and availability as their businesses’ primary problem dropped 4 percentage points to 23% last month, the problem remains 11 points above its historical average.
Thirty-five percent of owners reported job openings they could not fill, down 1 percentage point from July but 11 points above the historical average. With that, 82% of owners hiring or trying to hire reported few or no qualified applicants for the jobs they were trying to fill.
Thirty-one percent of owners have openings for skilled workers and 13% have openings for unskilled labor, the report said.
But as labor quality issues continue, reports of labor costs as owners’ single most important problem fell 1 point to 7% in August, the lowest level since March 2021. Reports of raising compensation and plans to do so stayed relatively unchanged between July and August at 31% and 18%, respectively.
“Small businesses are slowing down their hiring efforts as the summer comes to an end, with fewer owners reporting job openings or plans to create new positions,” NFIB Chief Economist Bill Dunkelberg said. “The pressure to offer competitive wages is still high, but it’s no longer a top challenge for most Main Street employers.”
The NFIB’s Small Business Optimism Index also fell last month to 98.7, down from July’s 11-month high of 99.8 but still above the 52-year average of 98.
The Uncertainty Index measure also dropped 2 points to 89 in August but stayed high above the historical average of 68.
“Uncertainty remains elevated among small business owners as they face a mixed set of challenges with weakened sales, supply chain disruptions, and inflation pressures,” Dunkelberg said. “While expectations for the overall economy dimmed, Main Street owners remain largely positive in the health of their own businesses.”
NFIB State Director Rosemary Elebash said this national survey mirrors the concerns of many small business owners in Alabama.
“Finding qualified workers is still the No. 1 challenge for many small business owners in Alabama and across the country,” Elebash said. “Owners need good employees so they can serve their communities and grow their businesses.”
The findings come from an August survey of 476 responses from randomly selected NFIB members across the country.