A significant number of small businesses (58%) reported hiring or trying to hire in June, up three points from the previous month, according to a recent survey conducted by the National Federation of Independent Business (NFIB).
However, among those actively hiring, 50 percent reported receiving few qualified applicants, and 25 percent reported receiving none — meaning a total of 75 percent struggled to find suitable candidates for their open roles. These figures emphasize a significant skills gap, where available workforce capabilities do not align with employers’ needs.
In response to these hiring challenges, many small business owners are taking proactive steps such as raising wages and offering training opportunities to attract and retain talent. In June, a seasonally adjusted net 33 percent of owners reported raising compensation, marking the largest monthly increase since January 2020. Looking ahead, a net 19 percent plan to increase compensation over the next three months, reflecting both ongoing wage pressures and cautious optimism about future hiring conditions.
The need for skilled labor remains particularly high, with 30 percent of owners reporting openings for skilled workers and 13 percent reporting openings for unskilled labor — both figures unchanged from May. Job openings were most prevalent in the construction, manufacturing, and transportation sectors, while finance and agriculture saw the fewest.
NFIB Chief Economist Bill Dunkelberg emphasized the importance of understanding these labor market dynamics, noting that “compensation pressures remain strong for those owners who are competing to retain and attract talent in their business.”
Labor quality continued to be cited as the most significant operating problem by 16 percent of small business owners, while 10 percent pointed to labor costs as their top challenge. Looking forward, a seasonally adjusted net 13 percent of owners plan to create new jobs in the next three months, up one point from May. Despite broader economic uncertainties, small business owners remain focused on addressing workforce shortages and ensuring they have the necessary staff to support their operations and growth.