Wage costs rise as owners attract and retain needed workers
Washington, D.C. (April 4, 2019) – Small business owners continue to hire and create jobs in March, with 12 percent of owners reporting increasing employment an average of 2.7 workers per firm, according to NFIB’s monthly jobs report, released today. Only one percent reported reducing employment an average of 2.4 workers per firm, one of the lowest percentage of owners reporting reductions in survey history.
Up two points from February, a net 33 percent reported higher compensation in March. A net 20 percent planned increases in the next few months, also up from last month.
“In 2019, small business owners have shown they are working tirelessly to fill new jobs, expand their business, and contribute to the economy,” said NFIB President and CEO Juanita D. Duggan. “Hiring is an investment for a small business owner, and owners are increasing those investments to keep up with sales growth.”
Sixty percent of owners reported hiring or trying to hire, up three points from February’s reading. Of those owners, 90 percent reported few or no qualified applicants for the position. Four points below the record high, 21 percent cited the difficulty of finding qualified workers as their Single Most Important Business Problem.
“The economy is at full employment, hiring plans are strong, and the record-high levels of job openings are positive indicators for economic growth,” said NFIB Chief Economist Bill Dunkelberg. “The main concern is the lack of qualified workers. Small business owners report that pay isn’t the issue, it’s finding someone to pay. Small businesses’ willingness to hire shows they see an economy that is solid enough to continue investing in labor.”
In March, a seasonally-adjusted net 18 percent of owners plan to create new jobs. Job creation plans were the strongest in construction (net 45 percent) and manufacturing (net 23 percent). Down two-points from last month’s record-high reading, eight percent of owners expressed concerns about labor cost. Complaints are the highest in transportation (11 percent), retail (16 percent), and professional services (18 percent).
Thirty-nine percent of owners reported job openings they could not fill in the current period, equal to the record high and February’s report. Down from last month, 12 percent of owners reported using temporary workers. Fifty-seven percent reported open positions for construction, 51 percent in manufacturing, and 46 percent in transportation.
The labor markets are tight for both skilled and unskilled workers, with 33 percent reporting openings for skilled workers, and 14 percent reporting openings for unskilled workers.