NFIB: 84% of Small Businesses Hiring Can’t Find Qualified Workers

Small business hiring demand is picking back up, but the labor pool is not cooperating. The latest NFIB Jobs Report shows that 62% of owners reported hiring or trying to hire in June, up 7 points from May, and 51% of owners (84% of those hiring or trying to hire) reported few or no qualified applicants for the positions they were trying to fill, up 5 points.

The talent gap is widening again

The share of owners citing few or no qualified applicants marks the highest level since September 2024. Twenty-seven percent of owners reported few qualified applicants for their open positions, and 24% reported none. In June, 19% of small business owners identified “labor quality or availability” as their single most important problem, up 6 points from May’s lowest level since December 2016.

32% of owners said they were unable to fill skilled and/or unskilled jobs, with 27% saying skilled jobs went unfilled and 12% unable to find unskilled labor.

Wage pressure eases, but the mismatch remains

While reports of labor quality or availability as the single most important problem rose in June, reports of labor costs eased. Eight percent of business owners reported labor costs as their single most important problem, down 6 points from May’s historic high reading.

Both labor compensation measures declined. A seasonally adjusted net 28% reported raising compensation, down 3 points from May and the lowest reading of the year. That is a notable read for Fed watchers tracking wage-driven inflation.

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Where the shortage is hitting hardest

Owners of construction, manufacturing, and service businesses all told the organization they were having serious trouble finding qualified help last month. Restrictions on immigration no doubt explain some of the hiring problems; the National Association of Home Builders reported immigrants accounted for a third of skilled construction workers in 2024.

“While more small businesses are looking to hire, many owners still cannot find qualified workers,” NFIB said, noting Main Street has positions ready to fill but the right applicants aren’t walking in the door. A seasonally adjusted net 11% of owners plan to create new jobs in the next three months, up 2 points from May.

Options market and stocks to watch

Traders should watch names tied to small business staffing, payroll, and Main Street spending:

• PCTL (PayChex) and PAYX: watch for guidance impact from stagnant small business hiring and slowing wage growth.
• ADP: watch small business employment reports for confirmation of the NFIB slowdown.
• INTU: watch for QuickBooks small business demand read-throughs.
• RHI and MMAN: watch staffing names for skilled labor placement demand.
• HD: watch for construction labor shortage flow-through to project timelines.

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