About a third of small business owners reported at least one unfilled job opening in surveys from the National Federation of Independent Business in late 2025. At the same time, the U.S. Chamber of Commerce’s Small Business Index fell in Q1 2026 from the prior quarter, and a smaller share of small firms planned to boost payrolls. Small employers cite skill gaps and inflation as central problems, while Bureau of Labor Statistics data point to a still-elevated pool of missing workers. The combination suggests Main Street is finding hiring stubborn even as firms pull back on expansion.

Small businesses continue to report stubborn openings even as their appetite for new hires cools. The National Federation of Independent Business found 32 percent of owners had at least one vacancy in both its August Jobs Report and its September snapshot, and NFIB analysts said skill gaps are a central cause of those unfilled roles.

Demand locked, qualifications missing

NFIB survey responses show a mixed picture of hiring activity. In August, 53 percent of owners said they had hired or tried to hire, down four percentage points from July. In September that share ticked up to 58 percent, indicating month-to-month variation but no sustained surge in hiring attempts. At the same time NFIB economists recorded rising pay moves. A net 29 percent of owners said they raised compensation in August, and 20 percent said they planned further pay increases over the next three months.

Still, finding qualified applicants remains a headache. The August NFIB report said 43 percent of owners who were hiring reported finding few or no qualified applicants. A separate NFIB summary cited in another outlet reported a much higher figure for September, saying 88 percent of those hiring encountered few or no qualified applicants, with 29 percent finding few and 21 percent finding none at all. Those divergent counts underline how uneven the hiring experience is across sectors and local markets.

Small firms are responding by raising pay for some positions, but not by expanding payrolls broadly. The U.S. Chamber of Commerce’s Q1 2026 Small Business Index showed the share of firms planning to increase staff fell to 30 percent, a pullback that feeds through to hiring pipelines and recruiting budgets.

Mastheads

Why firms are cautious even with steady spending

Outside the NFIB and Chamber data, labor-market signals look stable at the headline level but tell a different story for Main Street. Hirebox’s summary of Bureau of Labor Statistics figures noted the official unemployment rate was about 4.3 percent in August 2025, with roughly 7.4 million people unemployed.

But labor-force participation had slipped to 62.3 percent and the employment-population ratio to 59.6 percent, leaving what analysts call a missing-worker gap of millions who want work but aren't actively job hunting.

Business Insider and labor economists quoted there use the phrase Great Freeze to describe a period of low hiring and low firing. The reporting and linked commentary suggest employers are holding on to existing staff while avoiding new hires because of policy and trade uncertainty, localized pockets of weakness, and a desire to avoid future staffing shortfalls. ZipRecruiter labor economist Nicole Bachaud told Business Insider, "We’re seeing employers and job seekers both trying to wait out any of the uncertainty." Glassdoor’s chief economist Daniel Zhao described employers as labor hoarding after the Great Resignation era.

Bank of America and UBS analysts, also quoted in the Business Insider piece, argued that steady consumer spending and positive corporate earnings reduce immediate pressure to cut headcount even as companies curb new hiring. That dynamic helps explain why small employers report open roles even when they're reluctant to add permanent staff.

Inflation is another factor shaping decisions on Main Street. The Chamber’s Q1 2026 survey found 53 percent of small firms named inflation as their biggest challenge, up from 45 percent in the prior quarter. Firms reporting inflation as their top worry also expressed less intent to invest and expand payrolls, a pattern that tightens the labor market from the demand side as well as the supply side.

The combined evidence points to a two-part problem. Employers say they need workers, and many are willing to raise pay for specific roles. But skill mismatches, uncertainty and rising costs are constraining the flow of hires and cooling plans to grow payrolls across the board.

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The Chamber’s Q1 2026 Small Business Index, based on a late February-early March 2026 survey, shows a clear slide in hiring and investment expectations for the year ahead.

This article was created with AI assistance.