While small businesses are not hiring extensively, they continue to face difficulties related to labor cost and quality. Designed by Freepik

 

SACRAMENTO, CA (MPG) –  NFIB California State Director John Kabateck released the following statement regarding the recent monthly Jobs Report from the National Federation of Independent Business (NFIB), which showed that in March, 32% (seasonally adjusted) of small business owners reported job openings they could not fill, down one point from February. Unfilled job openings remain above the historical average of 24%. Twenty-seven percent have openings for skilled workers (down one point), and 12% have openings for unskilled labor (up two points).

“Not much new to report about the hiring difficulties small business owners continue to have, but what I think worth pointing out is the importance of state and federal policies on the overall health of Main Street enterprises that will give them the time to work this problem out. The importance of Congress making the 20% Small Business Tax Deduction permanent cannot be overstated. If only the California Legislature could do something as valuable. We’ve offered Sacramento our suggestions and followed up with our Good, Bad, and Ugly bill list as roadmaps to recovery.”

NFIB’s Jobs Report is a national survey of NFIB-member small-business owners, not broken down by state. The NFIB Small Business Employment Index is a new measure of the current state of the small business labor market. The Index integrates actual and planned changes in employment and employee compensation into a singular data point. A higher Index reflects an overall tighter labor market; a lower Index reflects an overall weaker labor market.

NFIB’s March Jobs Report shows that the Small Business Employment Index fell 1.9 points to 101.6. Despite the decline, the current reading remains above the 2025 average of 101.2 and the historical average of 100.

"While small businesses are not hiring extensively, they continue to face difficulties related to labor cost and quality. Despite the current stagnant employment growth, economic conditions could change rapidly,” said NFIB Chief Economist Bill Dunkelberg.

Highlights from the Latest NFIB Jobs Report

A seasonally adjusted net 12% of owners plan to create new jobs in the next three months, unchanged from February and close to the average of net 11%.

Overall, 52% of owners reported hiring or trying to hire in March, down 2 points from February.

In March, 15% of small business owners cited labor quality as their single most important problem unchanged from February and above the historical average of 12%. The last time labor quality reported as the single most important problem was below 15% was in December 2016.

Seasonally adjusted, a net 33% of small business owners reported raising compensation in March, down one point from February. A net 18% (seasonally adjusted) plan to raise compensation in the next three months, down four points from February and the lowest reading since July 2025.

Keep up with the latest California small business news at www.nfib.com. Follow us on X @NFIB_CA and on Facebook @NFIB.CA.