Small Business Employment Weakens

Sacramento Region, CA (MPG)  |  Source: National Federation of Independent Business

NFIB Data Shows That Small Business Owners Are Trying to Hire, But Cannot Find Qualified Workers

A large portion of small business owners reported that they were hiring or trying to hire, yet job creation turned slightly negative in April, according to the Jobs Report released by the National Federation of Independent Business (NFIB).

“For the first four months of 2016 job creation has been stagnant,” said NFIB Chief Economist William Dunkelberg.  “Month after month we see no strong direction in our jobs report. This month hiring activities increased, but apparently applicants are not qualified for the open positions.”

NFIB/CA State Executive Director Tom Scott added, “This is troubling news for small businesses especially here in California. Facing a shortage of qualified workers, small businesses will see labor costs increase, further adding to the cost of doing business in this state.”

The average employment change during the month of April decreased to an average loss of 0.08 workers per firm.  Twelve percent reported increasing employment an average 2.2 workers per firm while 13 percent reported reducing employment an average of 3.5 workers per firm.  Up 5 points, 53 percent of owners reported hiring or trying to hire.  Of those trying to hire, 87 percent reported few or no qualified applicants for the positions that they were trying to fill.  Twelve percent of owners cited the difficulty of finding qualified workers as their Single Most Important Problem, a high reading for this recovery.  Twenty-nine percent of all owners reported job openings that they could not fill in the current period, which is up 4 points.  A seasonally adjusted net 11 percent plan to create new jobs, up 2 points from March.

“For several months, owners have been reporting that finding qualified workers is the third ‘Single Most Important Business Problem’ behind taxes and government regulations and red tape,” Dunkelberg continued. “Small business owners want to hire and that is clear from our data, but they’re scrambling to find applicants to fill open positions.”

He also predicts that the April jobs number will remain weak, close to the 200,000 mark with little change in the unemployment rate. 

NFIB’s April Jobs Report is based on the NFIB monthly Small Business Economic Trends survey. The survey was conducted in April and reflects the response of 1644 small businesses. The full Small Business Economic Trends report was to be released on Tuesday, May 10th.

For more than 70 years, the National Federation of Independent Business has been the Voice of Small Business, taking the message from Main Street to the halls of Congress and all 50 state legislatures. NFIB has 350,000 dues-paying members nationally, with over 22,000 in California. NFIB annually surveys its members on state and federal issues vital to their survival as America's economic engine and biggest creator of jobs. To learn more visit www.NFIB.com/california.