Small businesses find some relief after struggling to hire

Small businesses have faced recruitment challenges in the tight U.S. labor market, going up against the often higher salaries and heft of large companies. But there are signs that smaller firms are feeling some relief in their very competitive quest for qualified workers.

Small businesses are less concerned about hiring these days, according to a new survey by the National Federation of Independent Business.

“Right now, 37% of small business owners are saying that they have an unfilled job opening currently,” said NFIB’s research lead, Holly Wade.

That’s a drop from 2023 levels. But it’s still harder for small firms to hire than it has been historically. Wade said that’s especially true in the transportation, wholesale and construction fields.

“That industry is just struggling to find workers to help with the increased construction and mainly residential construction,” she said.

Another sign that hiring pressures may be easing comes from the Bank of America Institute, which looked at payments to recruitment firms.

“What we’ve seen in our data is a decline back towards around 2019 levels. So it does look like hiring for small businesses is cooling,” said David Tinsley, a Bank of America Institute economist.

Though Brandi Britton at talent firm Robert Half said she wouldn’t describe it as “cooling,” but rather “proceeding with caution.”

“We definitely see small businesses maybe taking longer to hire, wanting to interview more people,” she said.

Those waves of job cuts at some big firms have been good for small businesses that have openings. “They have the ability to sell themselves as stable organizations unlikely to go through a layoff,” she said.

But that won’t solve all worker shortages — which, Britton said, have been acute in financial services and accounting.

“Between the lack of individuals getting a degree in accounting, the number of baby boomers that have retired and then individuals just leaving that sector has created a really big demand,” she said.

It’s especially tough, she said, for small firms where bookkeepers are key.