Nearly half of small business owners are not willing to hire because of labor costs and “skyrocketing inflation,” a newly released small business report shows.
The small business network Alignable released its July Hiring report which found that “45% of small businesses (SMBs) are halting their hiring, largely because they say they can’t afford to add staff.”
“This represents a significant hiring shift, and is largely a reaction to mounting labor costs, skyrocketing inflation, fears of a recession, and rising interest rates,” the group said.
The report found 4 percent of small businesses are planning to lay off workers and that “some employers noted that they have learned to live without the extra staff, making other changes and/or working longer hours themselves.”
Alignable’s survey found the sentiment varied across industries, with 66 percent of gym owners reporting a hiring freeze.
“The same goes for 63% in real estate, 58% in transportation, 55% in the automotive sector, and 55% of retailers,” the report states.
Others are reducing staff, including 5 percent in real estate and the automotive industry as well as 3 percent in retail. The hiring freeze also varies from state to state.
“The top 5 states most affected by the hiring slowdown are New Jersey (64%), Florida (63%), Texas (52%), Virginia (52%), and California (49%),” Alignable said. “From 3% to 14% of all SMB owners in these states say they’ll be forced to lay off staff, as well.”
The survey comes after the latest U.S. Bureau of Labor Statistics data show consumer prices rose 9.1 percent in the past year, the highest in more than 40 years. Meanwhile, the Bureau of Labor Statistics’ producer price index rose nearly the highest ever — at 11.3 percent in the previous twelve months.
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