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Employment Grew in August, Despite Lack of Qualified Workers

Andrew Martins
Andrew Martins

Data from two agencies highlight mixed results in last month's job growth figures.

  • SMBs reported 66,000 new jobs in August, which is a 1.72% increase in month-to-month hiring.
  • 33% of SMBs have job openings for skilled workers, and 13% have unskilled work openings.
  • 27% of businesses said finding qualified workers was their No. 1 business problem last month.

Hiring numbers throughout the U.S. showed an upward trend for the month of August, but companies still have a hard time finding qualified candidates for open positions. Two separate reports from the National Federation of Independent Businesses (NFIB) and CBIZ highlighted how both trends affected small businesses and their workforces last month.

Throughout 2019, reports from various sources show that the state of small business hiring in the U.S. has been somewhat encouraging, yet prone to issues from time to time. The storyline of mixed results in a consistently strong economy the last nine months, coupled with the ever-present specter of another recession, showcases how small businesses feel both confident and concerned about their prospects in the future.

"Small businesses continue to grow and add jobs despite talk of a potential economic slowdown," said NFIB President and CEO Juanita D. Duggan. "However, their biggest challenge remains a lack of qualified workers."

As small businesses begin to shift their focus to the potentially large economic returns that crop up at the end of the year, experts expect continuing job growth, despite a lack of qualified talent and a potentially downshifting economy.

Small business growth

In the latest CBIZ Small Business Employment Index, released earlier today, experts found that small businesses with 300 or fewer employees saw a 1.72% upswing in month-by-month hiring. Some of the industries that saw increases in hiring were transportation, education, real estate, construction and manufacturing.

"The strong economy coupled with summer's end has given Americans more reason to travel and spend more, resulting in a rebound in hiring trends across the board for the month of August," said Phil Noftsinger, executive vice president of CBIZ Employee Benefits. Some of that growth came from months of "continued economic growth, end-of-summer vacations and back-to-school shopping," he said.

According to a report by ADP and Moody's Analytics, small businesses hired 66,000 more workers last month on a month-over-month seasonally adjusted basis. Overall, they reported yesterday, 195,000 jobs were added to the private sector last month. Some of the largest increases in job growth, according to CBIZ, were in the central portion of the United States.

While the data from CBIZ was largely positive, small businesses in accommodation, food service and information services posted hiring declines. Looking forward, experts said they expect hiring to continue on a positive trend, though the end of the year may see "a tight band around hiring."

Qualified workers hard to find

While the outlook has generally been positive, the NFIB's monthly jobs report paints a complicated picture for small business owners. According to the report, a "record percentage" of SMBs had a hard time finding qualified workers last month.

Approximately 27% of business owners polled ranked finding qualified workers as their No. 1 business problem, with owners adding an average of just 0.19 workers per company in August. Though it's a small number, researchers said it marks a slight increase from July's figures.

To deal with this hurdle, 20% of small business owners polled said they anticipated creating more jobs. In addition, 21% said they plan to increase total employment, and 5% said they plan on employment reductions.

Last month, 64% of respondents said they either hired or tried to hire people, with 89% of those respondents saying they found few qualified candidates.

More than one-third (35%) of all business owners surveyed said they had job openings they were unable to fill, marking a four-point reduction from July. Of the businesses that had openings, 49% were in construction and 42% were in manufacturing. Construction continued to have the highest number of owners who stated they found "few or no qualified applicants" at 68%, while 59% of manufacturing small business owners said the same.

Researchers also found that 33% of SMBs have job openings for skilled workers and 13% have unskilled work openings. As a result of the lack of qualified candidates, 29% said they raised wages, and 19% said they plan to do so in the coming months.

"The continued shortage of qualified talent has put pressure on small business owners, compelling owners to raise compensation," said Bill Dunkelberg, chieft economist at NFIB. "Owners also continue to invest in employee training for those hired without the desired skills and experience in order to bring them up to speed."

Image Credit: seb_ra / Getty Images
Andrew Martins
Andrew Martins
Business News Daily Staff
Andrew Martins has written more than 300 articles for and Business News Daily focused on the tools and services that small businesses and entrepreneurs need to succeed. Andrew writes about office hardware such as digital copiers, multifunctional printers and wide format printers, as well as critical technology services like live chat and online fax. Andrew has a long history in publishing, having been named a four-time New Jersey Press Award winner.