Owners reporting labor quality as their top small business operating problem remains elevated at 23%, according to NFIB’s monthly jobs report. Labor costs reported as the single most important problem to business owners decreased one point to 11%, just two points below the highest reading of 13% reached in December 2021.
“What’s clear from this latest small business survey is that small business owners are still struggling to hire workers. The problem is even worse here in Indiana because of the high cost of health care. Indiana has one of the highest health care costs in the nation.
According to NFIB’s latest survey, the biggest reason that 65% of our small business owners don’t offer health care is that it’s too expensive. Indiana lawmakers have a great opportunity to act upon this staggering fact. Right now, they are considering a bill that would prevent hospitals from charging hospital rates in doctor office settings, forcing them to bill for the service where the care was provided. This would move the needle in the right direction and help make health care costs more affordable for small business owners across the state,” said Natalie Robinson, NFIB State Director in Indiana.
Seasonally adjusted, a net 42 percent reported raising compensation, down 4 points from February, and 8 points below the 49-year record high set in January last year. A net 22 percent plan to raise compensation in the next three months, down 1 point from February. Far more owners are having to increase compensation to compete than are planning to add to that expense with new hires or increased compensation. According to the BLS, compensation costs overall increased about 5 percent for the 12-month period ending in December 2022. But with labor demand remaining strong (as has consumer spending), firms must maintain competitive compensation to retain workers and hopefully to fill open critical positions. As long as consumers spend, firms will find it profitable to hire.
Forty-three percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, down four points from February. Thirty-four percent of owners have openings for skilled workers and 19% have openings for unskilled labor.
Small business owners’ plans to fill open positions continued to ease, with a seasonally adjusted net 15% planning to create new jobs in the next three months, down two points from February and well below the recent peak of 23% reached last September. While large businesses shed workers, small business owners have reported some hiring success in the last 4 months, with more firms reporting increased employment than reductions.
Overall, 59% reported hiring or trying to hire in March, down one point from last month. Of those hiring or trying to hire, 90% of owners reported few or no qualified applicants for the positions they were trying to fill. Twenty-six percent of owners reported few qualified applicants for their open positions and 27% reported none.
Seasonally adjusted, a net 42% of owners reported raising compensation, down four points from February. A net 22% plan to raise compensation in the next three months.
For more than 75 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is nonprofit, nonpartisan, and member-driven. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses, and remains so today. For more information, please visit nfib.com.
