Small-Business Employment Growth Slows: Report from American Drycleaner

Small Business Owners Struggle to Fill Job Openings as Labor Quality, Costs Remain Top Concerns

According to the latest jobs report from the National Federation of Independent Business (NFIB), small business owners are facing a number of challenges when it comes to filling job openings. In February, 37% of all owners reported job openings they could not fill, which is down two points from January and the lowest reading since January 2021. The percentage of small business owners reporting labor quality as their top small business operating problem decreased five points from January to 16%, the lowest reading since April 2020.

Despite a decrease in job openings among small businesses, employment activity has lessened somewhat as it becomes easier for owners to find qualified workers. However, labor demand remains strong and owners’ plans to fill open positions continue to slow, with a seasonally adjusted net 12% planning to create new jobs in the next three months, down two points from January and the lowest level since May 2020.

Labor costs reported as the single most important problem for business owners increased one point to 11%, only two points below the highest reading of 13% reached in December 2021. Overall, 56% of owners reported hiring or trying to hire in February, up one point from January. Of those hiring or trying to hire, 91% reported few or no qualified applicants for the positions they were trying to fill, up two points from January.

Seasonally adjusted, a net 35% reported raising compensation, down four points from January and the lowest reading since May 2021. A net 19% plan to raise compensation in the next three months, down seven points from January and the lowest since March

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