More Small Businesses Raise Pay to Attract Workers

Small business owners’ plans to add positions have weakened but remain relatively high, according to the National Federation of Independent Business (NFIB), with close to a fifth, or 17% saying in December that they plan to create new jobs in the next three months. That's down just 1 percentage point from November and 15 percentage points below a record high reading of 32% reached in August 2021.

Many struggled to fill open positions last month, with 41% of all owners reporting job openings they could not fill. The share of owners with unfilled job openings continues to exceed the 49-year historical average of 23%, but is 10 percentage points below a record high of 52% reached last July. Overall, 55% of owners reported hiring or trying to hire in December, down 4 percentage points from November.

The share of small business owners citing labor quality as their top operating problem remains elevated at 23%, up 2 percentage points from November, with labor costs identified as the single most important problem for 8% of respondents.

More than two-thirds, or 44% percent of small business owners said they raised compensation to appeal to workers, up 4 percentage points from November. A net 27% of owners said they plan to raise compensation in the next three months.