The latest jobs report shows the challenges small businesses face in hiring, which can impact job seekers and the economy. If you’re part of the workforce or looking for a job, understanding the trends in employment is essential.

Small Business Hiring Trends Decline

The National Federation of Independent Business (NFIB) recently released its May Jobs Report. The report indicates that the Small Business Employment Index barely changed, registering at 100.3 in May, just slightly down from 100.4 in April. This marks the third month of decline in this index. Currently, the reading is below the 2025 average of 101.2, but it remains above the historical average of 100.0.

In May, 29% of small business owners reported having job openings they were unable to fill. This number has decreased by five points since April, marking the lowest percentage since May 2020. Additionally, of those openings, 27% were for skilled positions, showing a two-point decline, while 9% were for unskilled labor, down four points. The job market continues to be unstable, making it a critical time for those seeking employment.

Challenges in Hiring Qualified Workers

While the NFIB didn’t release specific data by state, Mike O’Halloran, NFIB Maryland State Director, highlighted the struggles local small businesses face. He noted that many business owners report not finding any qualified applicants for their open positions. This difficulty, coupled with rising costs affecting operations, makes hiring more challenging than ever.

In terms of future hiring plans, only a net of 9% of business owners stated they intend to create new jobs in the next three months—a decrease of four points from the previous month. This is the lowest level seen since May 2020 and is now below the historical average of a net 11%. Surprisingly, 55% of owners reported that they are either hiring or attempting to hire, which is an increase of two points from April. However, 46% of those hiring indicated they were finding few or no qualified applicants.

Growing Concerns About Labor Costs

An interesting shift in priorities is occurring among small business owners. In May, only 13% cited the quality of labor as their most pressing issue, down five points from April. This is the lowest level since December 2016. However, the percentage of owners worried about labor costs surged to 14%. This figure, up five points from April, represents the highest score ever recorded in this survey.

While hiring and job openings decrease, compensation measures appear to remain stable. In May, a net of 31% of small business owners reported raising wages, a slight increase of one point from April. Additionally, 18% of owners plan to raise compensation in the next few months, which hasn’t changed since last month. This creates a tricky balancing act for businesses trying to attract workers without overspending.

Understanding the Employment Landscape

As the economy evolves, the labor market faces new challenges that affect job seekers and businesses alike. The decline in hiring and openings indicates that employers are feeling the pinch from rising costs and a shortage of qualified candidates. Yet, compensation remains steady, which could be a silver lining for those in employment or seeking jobs.

Staying informed about these trends can help individuals better navigate their job searches. Knowing that many employers are struggling could position potential employees to negotiate better terms or seek opportunities more strategically.

What this means for you

If you’re looking for a job, be aware that many small businesses are struggling but still hiring, so it’s a good time to apply for those open positions. If you ever need to review employment contracts, legal-document-to-plain-english-translator/”>AI legalese decoder can translate them into plain English in seconds. Understanding these documents can empower you to advocate for better work conditions or pay.

Source: https://www.nfib.com/news/news/maryland-small-business-job-openings-decline-in-may/