As the labor market remains tight, job openings that cannot be filled continue to increase, with 40% of small business owners reporting unfilled positions in the current period. This is a three-point increase from March, although it was the lowest reading since January 2021. The percentage of owners citing labor costs as their top operational challenge also rose slightly to 11%.
Despite an increase in hiring plans among small businesses in April, many open positions remain vacant as owners struggle to find employees. NFIB Chief Economist Bill Dunkelberg noted that small businesses are not seeing net gains in employment due to wage pressures and inflation contributing to a tight labor market. Additionally, owners’ plans to fill open positions have increased slightly, with a net 12% planning to create new jobs in the next three months.
Although labor quality is reported as the top problem for business owners, it has eased in the last two quarters. In April, 56% of owners reported hiring or attempting to hire, but 91% of them struggled to find qualified applicants. This has led to difficulties in filling skilled and unskilled positions, with 34% reporting openings for skilled workers and 18% for unskilled labor.
Despite these challenges, a net 38% of owners reported raising compensation, with 21% planning to do so in the next three months. Job openings were particularly high in the construction, transportation, and wholesale sectors, while they were lowest in agriculture and finance. Construction saw a significant increase in job openings, with over half of businesses reporting positions they could not fill.