Small Business Labor Market and Hiring Trends
In a recent interview on Bloomberg, NFIB Research Center Executive Director Holly Wade discussed the current state of the small business labor market and hiring trends. Wade shared insights from NFIB’s March jobs report, providing a snapshot of the situation on Main Street and outlining what to expect in terms of small business hiring and compensation in the near future.
Despite a slight easing of labor pressures from their peak in 2022, about 18% of small business owners still consider labor quality their single most important issue, with another 10% citing labor costs as a major concern. This means that over a quarter of small business owners are grappling with labor-related challenges as they operate their businesses.
Small business owners are also reporting an increase in wages over the past quarter or are planning to raise wages in the next three months. This suggests that there is still a strong demand for labor, with high levels of competition for workers leading to increased compensation packages in order to attract and retain talent. However, there has been a decline in the number of small business owners planning to hire in the next quarter. This trend has been ongoing for the past four months, bringing hiring plans back to levels seen in 2016. Despite this decrease in hiring intentions, there are still a significant number of unfilled job openings in the small business sector, albeit lower than the peak levels seen during the pandemic.
