Small Businesses Face Labor Shortages – After the pandemic, inflation hit the whole world. The businesses that just started face difficulties in surviving in the market and labor shortages.
Disruptions in the supply chain have emerged as the go-to theory for why small businesses are having trouble. A long list of industries is being hampered by a shortage of microchips, including producing produce, lumber, and durable goods. Many small businesses part of another company’s “supply chain” are having trouble starting up again.
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Small Businesses Face Labor Shortages
The National Federation of Independent Business (NFIB) said that optimism among small business owners fell below the 49-year average for the 10th month in October. This is because owners are dealing with rising prices and falling sales. The NFIB’s Small Business Optimism Index dropped by 0.8 points to 91.3, which is well below its average of 98 over the past 49 years. Inflation and a lack of workers continue to be problems for small business owners.
Thirty-three percent of owners said that inflation was their most significant problem with running their business, three points more than in September. Half of the companies said they are raising their prices because of inflation. The number of owners who think sales will go up dropped three percentage points from September to a net negative 13%.
Nearly half, or 46%, of owners, also said it was hard to fill job openings. This was the same as in September. 90% of business owners looking to hire said they had few or no qualified applicants for the jobs they were trying to fill.
44% of respondents said they raised pay to attract workers, and 32% said they planned to do the same in the next three months. This is up nine points from September and the most since October 2021. 10% of business owners said that labor costs were their biggest problem, and 23% said that the quality of their employees was their biggest problem.
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