Fully 60% of U.S. small businesses were “hiring or trying to hire” in July—a six-point increase over June, based on a poll of 10,000 owners conducted for the National Federation of Independent Business Jobs Report and released Aug. 3.
Indeed, the number of U.S. small business owners who said they planned to fill openings last month exceeded those with plans to cut their staffs by 19 percentage points on a seasonally adjusted basis, the NFIB data established.
That’s the highest level of proposed hiring since 1999—however, they may not find it so easy to attract the right people for the jobs. Eighty-seven percent of owners who hired or tried to hire reported difficulty finding qualified workers. Nineteen percent of owners cited the difficulty of finding qualified workers as their single most important problem—up four points from June.
And with the qualified candidates missing in action, “the tight labor market is driving up costs for small employers,” said NFIB Chief Economist Bill Dunkelberg in a formal NFIB statement. “More than a quarter of all owners reported raising wages in July, and the pressure was especially high in the construction industry.”
A separate NFIB survey completed last month identifies the reasons why qualified workers are hard to find. Among them are:
Lack of specific skills,
Weak work history,
Poor social skills and
Unrealistic wage expectations.
“Thirty five percent of owners reported jobs they couldn’t fill in July,” said Dunkelberg. “That’s a five-point increase from the previous month and the highest reading since 2001. The tight labor market is good for employees, but it’s becoming a problem for businesses that can’t find enough workers to satisfy customer demand.”
Job openings were most frequently reported in construction, manufacturing and nonprofessional services.
Finally, looking at all U.S. jobs, the Labor Department reported on Aug. 4 that the economy added 209,000 positions in July—up over expectations. Job gains occurred in food services and drinking places, professional and business services, and healthcare.
Total nonfarm payroll employment increased by 209,000 in July, and the unemployment rate was little changed at 4.3%, the U.S. Bureau of Labor Statistics reported.