Although a tight labor market might benefit job seekers, it's squeezing employers—including small businesses.
Despite recent headlines that U.S. worker productivity has dropped sharply in 2022 and tech, media, and e-commerce giants are shedding workers in widescale layoffs, the overall job market remains robust. If everyone looking for work got a job today, there would still be millions of jobs available, according to the latest data from the Bureau of Labor Statistics and the Chamber of Commerce. The result is an economy where workers still appear to have the upper hand: ready to quit their jobs and look for new ones at any moment, knowing opportunities far outnumber candidates.
More than 6 million American small businesses in 2021 had at least one employee, according to the Small Business Administration. Since 1995, 62% of new jobs have come from small businesses. The way small businesses treat their employees is more important than ever, as any decline in worker satisfaction could lead to another letter of resignation. Naturally, pay is among the top priorities for job seekers—whether they want to keep up with inflationary rises or simply see an opportunity to leverage for a pay bump—so the size of raises businesses give their employees is critical.
Swyft Filings compiled data from the National Federation of Independent Business, Paychex, and IHS Markit to determine how small businesses handle pay raises in this labor market. NFIB data came from surveys of small business owners, while the data from Paychex and IHS Markit comes from aggregated payroll information from clients of Paychex.
Keep reading to discover how small businesses are adjusting their payroll strategies to fit the current labor market.