Small-business owners added employees during January, and many are planning to raise pay levels to fill open positions, according to a jobs report from the National Federation of Independent Businesses (NFIB).
NFIB reported an average employment change per firm in January of 0.49 workers, the highest level since March 2019. Additionally, NFIB said 36 percent of small-business owners surveyed reported raising compensation, up seven points from December.
“Small businesses are keeping the strong economic momentum going in the New Year,” NFIB Chief Economist Bill Dunkelberg said in a release. “They are adding jobs and raising compensation. With the help of tax and regulatory relief, the small business economy is a strong force.”
According to the report, 13 percent of owners reported increasing employment an average of 2.8 workers per firm and 4 percent reported reducing employment an average of 2.8 workers per firm.
Small-business owners said their biggest problem was finding qualified workers. Twenty-six percent of owners reported it as their No. 1 problem, one percentage point below the August 2019 record high.
NFIB said 62 percent of construction firms reported few or no qualified applicants and 42 percent cited the shortage of qualified labor as their top business problem. Comparable figures for manufacturing were 52 percent and 34 percent, respectively.
Thirty-seven percent of small-business owners surveyed reported job openings they could not fill, up four points from December. Fifty percent had job openings in construction, which NFIB said was an indication that the inability to assemble teams is a contributor to the lackluster performance of the industry.
The report found that 19 percent of small-business owners plan to create new jobs at their business. Twenty-four percent said they plan to increase total employment at their firm, up five points; and 3 percent plan reductions, down two points.
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