Small Businesses Struggle With Hiring Challenges

Small businesses across America are stuck in a hiring nightmare that refuses to end.

The National Federation of Independent Business September 2025 jobs report reveals that 32% of small business owners have job openings they simply cannot fill. That figure has remained stubbornly locked at 32% or higher since July 2020, when the pandemic first disrupted labor markets.

The last time unfilled job openings dropped below 32% was five years ago. Despite economic growth and relative stability, Main Street continues to face a persistent talent shortage that's reshaping how small businesses operate.

The Qualified Candidate Wall

Here's where the problem gets worse. Of the 58% of small business owners who reported hiring or trying to hire in September, a staggering 88% said they encountered few or no qualified applicants for their open positions.

That's up 7 percentage points from August, suggesting the talent crunch is actually intensifying rather than easing.

Twenty-nine percent of owners reported few qualified applicants, while 21% reported finding none at all. Think about that for a moment: more than one in five small businesses trying to hire couldn't find a single qualified candidate for their open positions.

"Finding qualified applicants remains a challenge for our small business owners," said NFIB State Director Jerrod Shouse. "That's creating some uncertainty on Main Street."

Bill Dunkelberg, NFIB Chief Economist, told CNBC that small businesses consistently report optimistic hiring plans, but when the dust clears, very few jobs actually get filled. The result is a negative net increase in employment across the small businesses NFIB surveys.

Skilled Workers Remain Scarce

The shortage hits hardest for positions requiring specialized skills. Twenty-eight percent of small businesses have openings for skilled workers, unchanged from August. Another 13% are looking for unskilled labor, also flat from the previous month.

Industries facing the most acute hiring challenges include construction, manufacturing, and transportation. These sectors require specialized expertise that simply isn't available in sufficient numbers.

On the flip side, wholesale and finance industries reported the lowest levels of unfilled openings, suggesting the pain isn't distributed evenly across the economy.

Hiring Plans Tick Up Despite Challenges

Despite the difficulties, there's a glimmer of optimism. A seasonally adjusted net 16% of owners plan to create new jobs in the next three months, up 1 percentage point from August. That marks the fourth consecutive monthly increase and represents the highest level of hiring intentions since January 2025.

This creates an interesting paradox. Small businesses want to hire and are making plans to expand their workforces. But the qualified candidates they need simply aren't showing up.

The gap between hiring intentions and hiring reality has become one of the defining features of the current labor market. Plans are optimistic, but execution remains frustratingly difficult.

Wages Rise, But Future Increases Uncertain

Small businesses are responding to labor shortages in the most direct way possible: raising wages. A net 31% of small business owners reported increasing compensation in September, up 2 percentage points from August.

But look ahead, and the picture gets murky. Only 19% plan to raise compensation in the next three months, down 1 percentage point from August. That suggests businesses are becoming more cautious about future wage increases even as they struggle to fill positions.

The disconnect likely reflects economic uncertainty. Small business owners face cost pressures from multiple directions—labor, materials, financing—and they're not confident they can continue raising wages indefinitely while maintaining profitability.

Labor costs as the single most important problem for business owners rose 3 percentage points from August to 11%. Meanwhile, 18% cited labor quality as their top challenge, down 3 points from August but still representing a significant concern.

What Small Businesses Can Do

Given these tight labor market conditions, small business owners face a choice: wait for conditions to improve or adapt their strategies now.

The waiting game isn't working. Five years of unfilled openings at 32% or higher suggests the structural problems aren't resolving on their own.

Smart adaptation includes several tactics:

Cast a wider net by recruiting in untapped geographic areas or demographic groups. Many small businesses limit their search too narrowly, missing potential candidates who could succeed with proper training.

Invest in upskilling current employees. If you can't find qualified candidates externally, develop the talent you already have. Training programs and professional development can fill skills gaps while boosting retention.

Sweeten the deal with flexible work arrangements. Remote or hybrid options, flexible scheduling, and other quality-of-life benefits can make your openings more attractive without necessarily requiring huge wage increases.

Consider alternative hiring models like contract workers, part-timers, or retirees looking for flexible opportunities. The traditional full-time employee model isn't the only way to fill critical needs.

"Main Street job openings remain above their historical average, with owners reporting few qualified applicants," said Chief Economist Bill Dunkelberg. "While a recession appears unlikely, small business owners continue to experience economic uncertainty as many owners continue to grapple with labor imbalances."

The small business hiring crisis isn't going away anytime soon. But businesses that get creative with recruitment, compensation, and workforce development will be best positioned to win the relentless tug-of-war for talent.

Looking to thrive in this candidate-crunch era? Consider reshaping your hiring strategy or explore roles through Metaintro for verified opportunities.