Job openings lessen to pre-pandemic levels

Small business struggle to find quality workers is easing a bit, according to NFIB’s monthly jobs report.

The report shows a seasonally adjusted number of 37% of all owners say the “jobs to be filled” number is down two points from January and the lowest since Jan. 2021 with 16% of small-business owners saying “labor quality” is the top operating problem.

The number declined from January to 16% and is the lowest since April 2020.

In Tennessee, small business (businesses with less than 500 employees) job growth from 2015 – 2020 sat at 11.1%, ranking second in the Southeast and 7th in the U.S. In 2020, there were 165,422 small businesses in the state with 2,116,872 employed.

That’s way back before the pandemic.

“Job openings among small businesses decreased in February to pre-pandemic levels,” said NFIB Chief Economist Bill Dunkelberg. “Employment activity has lessened somewhat as it becomes easier for owners to find qualified workers. Even with this slowdown, labor demand remains strong.”

With owners plans to fill open positions slowing (only 12% are planning to create new jobs in the next three months, the lowest percentage since May 2020), the problem of labor costs is rising. 11% reported labor costs as the most pressing issue (though the number is down from Dec. 2021 when it sat at 13%.

“Overall, 56% of owners reported hiring or trying to hire in February, up one point from January,” according to the report. “Of those hiring or trying to hire, 91% reported few or no qualified applicants for the positions they were trying to fill, up two points from January. Twenty-five percent of owners reported few qualified applicants for their open positions (down one point) and 26% reported none (up three points).”

Wages aren’t increasing. Only 35% of employers in the market reported raising wages or planning to. That number is down from January and is also the lowest reading since May 2021.

“A net 19% plan to raise compensation in the next three months, down seven points from January and the lowest since March 2021,” according to the report.

Skilled worker need is up, and “unskilled” labor need is shrinking. According to the report, Job openings in construction were up six points from last month and over half have a job opening they can’t fill with construction, transportation and wholesale sectors having the highest amount of job openings available.

Agriculture and finance have the lowest.

Image by pvproductions on Freepik.

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