The National Federation of Independent Business (NFIB) monthly jobs report has revealed that only 14% of small business owners intend to hire new employees over the next three months. This marks the lowest level since May 2020 and a decrease of two percentage points from December.
In the current quarter, 39% of all owners reported having vacant job positions, representing the lowest reading since January 2021 and a decrease of one point from December.
Labor quality remains the top operating issue for small business owners, as reported by 21% of respondents. Labor expenses were recognized as the most critical difficulty for business owners, increasing by one point to 10% compared to the previous month’s record of 13% in December 2021.
In January, 55% of business owners reported employing or attempting to hire, the same as in December. Of those looking to fill positions, 89% stated they had few or no qualified applicants. Additionally, 26% of owners reported receiving few or no qualified applications for available roles, while 23% reported none at all.
NFIB Chief Economist Bill Dunkelberg states, “Small business owners are struggling to find enough workers to fill their open positions, despite strong consumer spending. Companies are offering higher pay to attract and retain workers who are willing and able to perform their duties, but the tight labor market is still making it difficult to hire.”
According to the report, 39% of respondents reported a pay increase after seasonal adjustments. This is the highest percentage since May 2023 and represents an increase of three percentage points from December. Additionally, 26% of respondents plan to raise pay over the next three months despite being three percentage points lower than in December.