WJR Business Beat: Small Business Labor Costs Continue To Rise (Episode 311)

Good morning, Paul! As we know, small business owners are plagued by staffing troubles these days, both in their efforts to attract and employ new talent as well as to retain talent currently employed. And so what are small businesses doing to address the issue? Well, some are accommodating requests to work remotely, either full time or part time, while other small businesses are going as far as to offer raised compensation opportunities for coming on board and/or for staying onboard. And this has become such a prevalent practice that recent data from the latest monthly survey by the National Federation of Independent Businesses shows that the percentage of small businesses who are raising compensation is now at its highest level in 48 years and the second record-setting month in a row. In addition to the seasonally adjusted record-setting compensation increases the share of businesses that were unable to fill positions reached an all-time high as well, up to 51% now. Also a second record month in a row. It’s therefore no surprise 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 FIB chief economist, William Dunkelberg, in a commentary. For most small business employers, labor costs are the largest operating outlay and owners will be compelled to pass those costs onto their customers by raising prices. The survey was just the latest signal that businesses have been grappling with labor shortages. A record number of employees quit in August while employers reported near record numbers of job openings, according to the data from the Bureau of Labor Statistics. Now Paul, it’s hard enough to be successful in business, especially for small business operators, but the challenges now facing small business operators, from supply chain issues to inflation issues and even from these rising labor costs, are making it an even more challenging environment in which like never before only the fittest will survive. I’m Jeff Sloan, founder and CEO of startupnation.com and that’s today’s Business Beat and the Great Voice of the Great Lakes, WJR.