The National Federation of Independent Business (NFIB) is an organization that advocates on behalf of small and independent business owners. As part of their services the organization tracks and publishes a monthly optimism index that economists look to as a potent indicator of what is happening on America’s Main Streets. According to the group’s March 2021 Small Business Economic Trends report, small business owners are expressing more optimism about the future then they have in a year, but their hopes for the future are tempered by concerns about hiring.
The group recently reported that for March 2021 the index number was 98.2, which is the index’s historic average. Though this reflects an upswing from the previous month’s index number of 95.8, there is still a long way to go to rival February 2020’s record-setting 104.5. One month after hitting this remarkable number, the pandemic struck the United States hard and optimism tumbled as COVID-19 sickened and killed thousands and states mandated restrictions on businesses. Consumers began staying home and saving their money.
There is reason for optimism to be on the rise. More and more people are being vaccinated and states are beginning to allow businesses to reopen, but now business owners have a new headache. They are struggling to find the workers that they need to operate their businesses and serve their customers.
The hiring challenges being faced by small business owners is counterintuitive. Common sense tells us that with more than 8 million people having lost their jobs due to the pandemic, workers would be clamoring for job opportunities. Unfortunately, a survey shows that 42% of small businesses are unable to fill their openings. Some blame the unemployment benefits being paid under the CARES Act, but economists say that hiring problems began long before the pandemic struck.
Small businesses are particularly dependent upon consumer satisfaction, and providing that is dependent upon having adequate personnel. To offset the challenge of hiring, 25% have indicated that they are offering workers increased pay. While larger, well-established businesses had greater access to multiple resources and were less impacted by government restrictions, small businesses suffered significantly under the pandemic, and are counting on the virus fading from the American landscape so that business can return to “normal.” Commenting on the challenges that lay ahead, NFIB chief economist Bill Dunkelberg said, “Main Street is doing better as state and local restrictions are eased, but finding qualified labor is a critical issue for small businesses nationwide.”
About Sonu Shukla, CPA, CFP
Sonu Shukla is a Certified Public Accountant as well as Certified Financial Planner. He believes in proactive tax planning and has the skills, education and experience to demonstrate passionately planned financial strategies. His firm tailors highly efficient tax plans for his small business clients, all in a one on one environment where he and the client can bounce ideas around until every detail is worked out. Located in Orlando, FL, he services all of Florida.
