Small businesses are the backbone of the economy, but recent trends show they’re facing significant hiring challenges. Understanding these issues could impact everyone, from job seekers to consumers, as they shape economic growth and community stability.

What the Latest NFIB Report Reveals

The National Federation of Independent Business (NFIB) recently released its June Jobs Report, highlighting a trend that has many small business owners concerned. The Small Business Employment Index remained virtually unchanged at 100.2, slightly down from May’s 100.3. This marks the fourth consecutive month of decline for the Index. While the current reading is below the 2025 average of 101.2, it’s still just above the historical average of 100.0.

This flat growth in small business employment indicates that job creation is stalling. In June, 32% of small business owners reported having job openings they couldn’t fill, a troubling increase of 3 percentage points from May, which was already at its lowest level since May 2020. Moreover, 27% of these businesses sought skilled workers, a figure that remained stagnant, while unskilled labor openings rose by 3 percentage points to 12%.

Complex Hiring Climate

The hiring climate for small businesses is rapidly evolving, and it seems that many employers are struggling to find qualified candidates. Jared Weiser, the NFIB Ohio State Director, emphasizes that despite challenges, small businesses are making strides to hire. He notes, “As we celebrate America’s independence this weekend, small businesses continue to remind us of what hard work and consistency can achieve right here in Ohio.”

Overall, 62% of business owners reported actively trying to fill positions in June, a significant increase of 7 points from the previous month. Despite this, a concerning 51% of employers indicated that they encountered few or no qualified applicants. Escalating labor shortages hinder hiring efforts, with 27% reporting a shortage of qualified applicants and 24% stating they found none at all.

Shifting Concerns in Labor Quality and Costs

Interestingly, small business owners have shifted their main concerns regarding labor. In June, 19% of them highlighted “labor quality or availability” as their most pressing issue, a rise of 6 points from May. This is noteworthy because, typically, labor costs have been the predominant worry for businesses.

However, this month, only 8% of owners cited labor costs as their single largest problem, representing a steep decline of 6 points from May’s historically high levels. This shift underscores the pressing issues related to finding qualified labor rather than rising costs putting pressure on small businesses.

Compensation Trends Declining

The NFIB report also delved into labor compensation. In June, net measures showed a decline in pay raises: 28% of owners reported raising wages, down 3 percentage points from May. This marks the lowest compensation reading of the year. Looking ahead, only a net 17% of business leaders plan to increase compensation in the upcoming three months, which is also a decrease from May’s previous numbers.

Despite the challenges, some small business owners remain optimistic. With a net 11% planning to create new jobs in the next three months, hiring intentions are back to their historical average. Yet, these employees will face an uphill battle to find the right candidates despite their efforts.

What this means for you

For job seekers, this report highlights the importance of enhancing skills and qualifications to stand out in a competitive job market. If you’re ever reviewing employment contracts, you can rely on tools like legal-document-to-plain-english-translator/”>AI legalese decoder to translate them into plain English quickly. Understanding these job dynamics can help consumers gauge the local economy’s overall health and job prospects in their area.

Source: https://www.nfib.com/news/press-release/ohio-small-business-job-openings-rebound-in-june/