In a shifting labor landscape, small businesses are feeling the pulse of the economy as they navigate notably mixed job market signals. According to the latest NFIB Jobs Report for August 2025, 32% of small business owners report unfilled job openings, marking a slight decline from July. This trend reflects broader challenges in finding qualified candidates, a concern that continues to weigh heavily on the minds of business owners.

Small businesses are often the cornerstone of the economy, yet they find themselves grappling with persistent staffing issues. While 32% indicates progress since pandemic lows, it continues to illustrate the labor market’s tightness. “While the economy appears to be doing well, small businesses are scaling back on job openings,” noted NFIB Chief Economist Bill Dunkelberg. “Small business owners with job openings are still looking for qualified applicants, many citing labor quality as their single most important problem.”

The report shows a nuanced picture of the workforce needs in small enterprises. 21% of owners ranked labor quality as their top concern—consistent with the previous month. Interestingly, 28% have openings for skilled positions, reflecting a drop of 1 point, while the need for unskilled labor has seen a slight increase with 13% reporting such openings, up 1 point. These numbers indicate a complex demand for various skill sets.

Currently, 53% of small business owners reported hiring or attempting to hire in August, down 4 points from July. Among those, a significant 43%—a whopping 81% of those actively hiring—reported finding few or no qualified applicants, a slight decrease from the previous month. Breaking down these numbers, 26% of business owners are struggling with a lack of qualified candidates, while 17% indicate they have found none at all.

Across sectors, the demand for labor varies significantly. The construction, manufacturing, and transportation industries are witnessing the highest levels of job openings, while the finance and wholesale sectors lag behind. This disparity emphasizes the importance of tailoring recruitment strategies to meet the unique demands of specific industries.

Despite current complications, optimism persists among small business owners regarding job creation. A net 15% plan to expand their workforce in the coming three months, marking a third consecutive month of growth in this area. This upward trend in hiring intentions aligns with the broader economic recovery but highlights the necessity for businesses to rethink their recruitment and retention strategies.

Another crucial aspect for business owners to consider is compensation. The NFIB report indicates that a net 29% of owners raised compensation in August, which is an uptick of 2 points from July. Looking forward, 20% plan to further increase compensation in the next three months, up 3 points over the same period. This development underscores the competitive labor market, as businesses vie for talent amid rising wage pressures.

While lower labor costs had previously been reported as a primary concern for 9% of business owners, this figure has now decreased slightly, indicating shifts in business expenses that may allow for more flexibility in hiring and compensation strategies.

For small business owners, these findings offer both insights and challenges. Understanding the evolving landscape of labor demands will be pivotal to formulating successful hiring and operational strategies. Balancing the pressures of compensation, recruitment, and ensuring quality hires will require agility and foresight.

As business owners ponder these insights, they will need to invest in innovative hiring practices, competency-based assessments, and perhaps even employee development programs that align with their strategic goals. Exploring partnerships with local educational institutions, participating in job fairs, or leveraging technology for recruitment can help bridge the gap between available jobs and the talent supply.

The path forward remains complex, with an optimistic outlook tempered by hiring hurdles. Small business owners who are proactive in addressing these dynamics may find themselves better positioned to thrive.

For more information, you can view the full NFIB Jobs Report here.

This article, “Small Businesses Struggle with Job Openings Despite Economic Growth” was first published on Small Business Trends