NFIB: Small business job openings fall as labor costs reach record high

FOX23 News at 9 p.m

JEFFERSON CITY, Mo., (KBSI) — Small business job openings declined in May as employers continued to grapple with rising labor costs and challenges finding qualified workers, according to the National Federation of Independent Business.

NFIB’s May Jobs Report found the Small Business Employment Index slipped to 100.3, down slightly from 100.4 in April and marking the third consecutive monthly decline.

The report found 29% of small business owners reported job openings they could not fill, down 5 percentage points from April and the lowest level recorded since May 2020. Openings for skilled workers fell to 27%, while openings for unskilled labor dropped to 9%.

NFIB Chief Economist Bill Dunkelberg said concerns about labor costs reached the highest level in the survey’s history.

“Small business owners are facing mounting pressure to retain workers, and many firms are navigating costly new state mandates,” Dunkelberg said.

According to the report, 14% of business owners identified labor costs as their single most important problem, up 5 percentage points from April. Meanwhile, 13% cited labor quality as their top concern, down 5 points.

Hiring plans also declined. A seasonally adjusted net 9% of owners said they plan to create new jobs in the next three months, down 4 points from April and the lowest level since May 2020.

NFIB State Director Brad Jones said many business owners continue to struggle to find qualified applicants while managing increasing operating costs.

Despite those challenges, compensation trends remained relatively stable. A net 31% of owners reported raising compensation in May, while 18% said they plan to increase compensation during the next three months.