Small businesses aren’t happy with who’s applying for their open jobs.
Driving the news: According to the NFIB’s July Small Business Jobs Report, "labor quality" is the top overall biggest concern, with 26% of survey respondents identifying it as their "single most important problem."
Why it matters: Companies everywhere are struggling to find workers to fill open positions. And despite many employers raising wages to attract talent, these hiring issues persist.
Go deeper: Of those surveyed, 63% said they were currently hiring or trying to hire. Of this group, 89% said there were few or no "qualified job applicants."
- Meanwhile, a record high net 39% said they increased pay. And a net 26% said they planned to increase pay within the next month.
- A modest 8% citied "labor cost" as their top problem.
Between the lines: You might think that if labor cost isn’t a top problem, then the solution is for employers to raise pay endlessly until those qualified applicants come.
- But as ADP chief economist Nela Richardson recently explained to Axios, raising pay for new applicants often means having to raise pay for existing employees, which is costly.
- Also, raising pay now gives employers less flexibility down the road as employers would rather avoid having to cut pay down the road.
What to watch: The July U.S. employment report comes out today and will provide the latest update on what industries are hiring and how much employers are having to raise wages to fill those roles.