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Small Businesses Report Shows Worker Shortage Loosened in May, NFIB Says

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Small businesses reported that the level of worker shortages was less severe in May, with a seasonally adjusted 29% of respondents in a National Federation of Independent Business survey released Thursday saying they were having trouble hiring the workers that they needed, down from 34% in the previous month and the lowest since May 2020.

The NFIB's Small Business Employment Index fell to 100.3 in May from 100.4 in April, still above the historical average of 100.0 but now below the 2025 average of 101.2.

The percentage of business owners reporting labor quality as their top business concern fell to 13% from 18%, but labor costs were listed as single most important concern by a record-high 14%, up from 9% in April.

"Concerns about rising labor costs increased significantly to the highest reading in the survey's history," said NFIB Chief Economist Bill Dunkelberg. "Small business owners are facing mounting pressure to retain workers, and many firms are navigating costly new state mandates. While current conditions restrict Main Street's already-thin profit margins, compensation measures remain steady for now."

About 55% of owners said they were trying to hire in the month, up from 53% in April. Around 84% of the respondents who were hiring or trying to hire reported finding few or no qualified applicants for the position they were trying to fill.

A seasonally adjusted net 31% of owners said they needed to raise compensation to hire workers in May, up slightly from 30% in April. A net 18% of owners said they plan to raise compensation in the next three months, the same as in April.

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