NFIB report: Strong month for hiring despite a tight labor market
Small business owners continued to hire in March, and they are having to increase compensation to remain competitive in a tight labor market, according to the March Jobs Report released April 6 by the National Federation of Independent Business (NFIB).
“The post-election optimism we’ve seen among small business owners has led to more job openings, but small employers are struggling to find qualified applicants,” said NFIB President and CEO Juanita Duggan.
Small business owners reported a seasonally adjusted average employment change of 0.16 workers per firm. Fifty-one percent reported hiring or trying to hire, but 45 percent reported that there were few or no qualified applicants to fill open positions. Sixteen percent of owners cited finding qualified workers as their Single Most Important Business Problem.
“The current labor market is one of the tightest I have seen in the 43-year history of NFIB’s survey,” said NFIB Chief Economist Bill Dunkelberg. “The scarcity of qualified applicants continues to frustrate small business. They often have to compete with larger corporations which have more resources to attract employees.”
Almost a third of small employers reported job openings that they could not fill in the current period. A net 28 percent of owners reported raising workers’ compensation, the second highest reading observed since mid-2007.
“Just like we saw in 2007, more owners are increasing compensation to attract and retain good employees,” Dunkelberg said. “The March reading was strong. However, owners are still struggling to fill open positions.”
Owners still showed confidence in future business conditions as a seasonally adjusted 16 percent reported plans to hire. NFIB’sSmall Business Optimism Index has skyrocketed since November, which NFIB says is directly related to the promise of policy changes from Washington. Duggan noted that the failure to repeal Obamacare, which has discouraged job creation, could affect the small business optimism in the future.
“Congress had a chance to repeal $1 trillion in taxes and most of the Obamacare mandates that are crushing small businesses,” said Duggan. “Our research over the next few months will show whether small business optimism is fading as a result of Congress’ failure to repeal Obamacare.”