Small business owners are in a challenging yet evolving labor market, according to the latest NFIB June Jobs Report. As job openings rebound, the opportunities for hiring come with the persistent issue of locating qualified candidates, a trend that could impact your business’s growth strategy.

The NFIB Employment Index held at 100.2 in June, a slight decrease from May’s 100.3. This marks the fourth consecutive month of decline, placing the current reading below the 2025 average of 101.2 but above the historical standard of 100.0. What does this data suggest for small business owners? While there is a slight improvement in job openings, the struggle to find skilled labor continues to loom large.

In June, 32% of small business owners reported vacancies they were unable to fill, a notable increase from May’s figures. This is particularly concerning as 27% of those openings are for skilled positions, with 12% needing unskilled labor—indicating specific sectors are facing greater challenges than others.

“Main Street job openings are starting to pick up after a decline in May,” stated NFIB Chief Economist Bill Dunkelberg. “While more small businesses are looking to hire, many owners still cannot find qualified workers.”

This sentiment resonates deeply within small business communities, where hiring challenges can directly affect operational efficiency. Over half of business owners currently hiring or attempting to hire—51%—reported receiving few or no qualified applicants for open positions. This creates a paradox for small businesses; although there’s an eagerness to expand, the talent deficit poses serious constraints.

A proactive approach to this issue includes diversifying recruitment efforts. Owners should also consider enhancing training programs and offering incentives that could attract potential employees. Moreover, understanding the specific needs of your business and communicating them clearly in job postings can help draw in more relevant candidates.

Looking at compensation, there’s a mixed picture. While 28% of owners raised wages in June—down from earlier this year—only 17% plan to increase compensation in the upcoming months, showcasing the delicate balance between incentivizing employees and managing costs. Notably, 8% of owners identified labor costs as their top concern, reflecting shifting priorities as hiring quality takes center stage.

So what can small business owners do in light of these developments? First, review your current compensation packages and consider whether they align with your competitors. Offering benefits such as flexible work arrangements or professional development opportunities might set your business apart.

As the job market continues to evolve, maintaining a close watch on trends is critical. With a net 11% of owners planning to create new positions in the next three months—an increase of 2 points from May—there’s cautious optimism in the air. However, the reality remains that many employers will face hurdles in securing talent to fill these roles.

The increased attention to labor quality and availability, evident in the rise of small business owners citing it as their principal problem, signifies a need for strategic workforce planning. Investing in recruitment technology or collaborating with local educational institutions to develop talent pipelines might serve as practical steps to alleviate these challenges.

While the NFIB Jobs Report shows tentative signs of recovery, navigating the complexities of hiring in the small business landscape requires a multifaceted strategy. As Dunkelberg emphasizes, the labor market is dynamic, and small business owners must adapt to seize emerging opportunities and combat ongoing challenges.

For further details, you can view the complete NFIB Jobs Report here.

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This article, “Small Businesses Struggle with Job Openings Amid Labor Shortage” was first published on Small Business Trends