Small Businesses Hike Pay to Lure Scarce Workers

Number of the Day: The most relevant or interesting figure in personal finance

41.7%

The Balance

That’s the net share of small business owners who raised compensation in September—the highest percentage in a survey going back 48 years, and the second record-setting month in a row—as firms struggle to hire and retain workers.

Small business owners were plagued by staffing troubles last month, according to the latest monthly survey by the National Federation of Independent Business, released Tuesday. In addition to the seasonally adjusted, record-setting compensation increases, the share of businesses that were unable to fill a position reached an all-time high of 51%, also a second record in as many months. It’s little wonder then that the share of businesses citing labor costs and labor quality as their top problems also set 48-year records in the survey of 537 businesses.

“More and more small business owners are struggling to find workers for their open positions,” said NFIB Chief Economist William Dunkelberg in a commentary. “For most small employers, labor costs are the largest operating outlay and owners will be compelled to pass those costs on to their customers by raising prices.”

The survey was just the latest signal that businesses have been grappling with labor shortages. Record numbers of employees quit in August, while employers reported near-record numbers of job openings, according to data from the Bureau of Labor Statistics released Tuesday.

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