Small Business Owners Planning to Raise Compensation at Highest Level Since 1989
Thirty percent of small business owners reported raising compensation and 26 percent plan to do so in the coming months, the highest level since December 1989, according to the National Federation of Independent Business (NFIB)’s monthly jobs report. Owners added an average of 0.29 workers per firm in November, which was the highest level since May. However, finding qualified workers has remained the top issue with 26 percent of owners reporting it as their number one problem.
“Despite a tight labor market, small business owners are doing exactly what they said they would do thanks to tax relief. They’re creating new jobs and raising compensation at record levels,” said NFIB President & CEO Juanita D. Duggan. “The only thing holding them back continues to be finding qualified workers, but in spite of that challenge the small business economy is roaring.”
Sixty-one percent reported hiring or trying to hire and 88 percent of those reported few or no qualified applicants for the job. Thirty-eight percent of all owners reported job openings they could not fill in the current period. In transportation, 50 percent of owners had job openings, 48 percdent in construction and manufacturing.
A seasonally adjusted net 21 percent plan to create new jobs. Nineteen percent of owners plan to increase total employment at their firm, while five percent plan reductions.
Ten percent of owners cited labor costs as their top problem, one point below the record high level reached in September. In the retail sector, 18 percent reported labor costs as their main issue, a record for the industry.
“The labor shortage continues to hinder the productivity of small businesses,” said NFIB’s Chief Economist Bill Dunkelberg. “The retail industry is facing compensation pressures due to labor shortages, but also higher minimum wage laws in many parts and wage competition with large firms.”
Thirty-one percent of owners have openings for skilled workers and 15 percent have openings for unskilled labor. Down from last month, 31 percent of owners reported few qualified applicants for their open positions and 22 percent reported none. Reports of “few or no qualified applicants” were high in construction (67 percent), manufacturing (57 percent), and retail (54 percent).