Small businesses creating more jobs but unable to hire in tightening market

Posted on Wednesday, June 12, 2019 by System

By Abigail Draper, OSCPA communication and engagement manager

Small businesses in the United States are creating more jobs than they have in the past 45 years, but wage costs and an inability to find qualified workers is preventing them from hiring. 

Come on in, we're open sign.

“Job creation among small businesses broke the 45-year record in February with a net addition of 0.52 workers per firm...The previous record was in May 1998 at 0.51 workers per firm,” The National Federation of Independent Businesses reported in March.

Even though they have these jobs open, small businesses are finding it difficult to fill them.

“57% of owners reported hiring and trying to hire, with 49% of those owners reporting few or no qualified applicants for open positions.”

Yahoo suggests the issue might be caused by increased business costs for owners. “In 2018, 73% of firms said they passed the higher costs of business onto their customers in the form of higher prices.” If owners are spending more on business-related expenses other than hiring, then they might be tightening their budgets for new employees.

“The smaller the company, the greater the challenge,” Mark Zandi, chief economist of Moody’s Analytics told the Wall Street Journal. As the labor market gets tighter, “their problems are only going to intensify.”

Based on these indications, only 44% of small business owners surveyed by Yahoo expect to hire new employees in 2019. This is a drop from 48% expecting to add to their payrolls in 2018.

Have you noticed a tightening labor marketing in your small business? Let us know in the comments below!

Leave a comment