The tight labor market has employers shaking in their boots. While many industries report steady hiring initiatives for 2019, the optimism about filling these open roles, and being able to offer the salary and wages workers want, continues to decline.
The latest Paychex Business Sentiment Report shows optimism among business owners in many areas—including business outlook, ability to fill open positions, and ability to raise wages—is trending down since the last report in October 2018.
The report, issued by Paychex, Inc., a provider of integrated human capital management solutions and services for payroll, benefits, human resources, and insurance services, is the result of polling 500 randomly selected business owners with 500 employees or less between February 15 and 26 about topics impacting their profitability and prospects for growth.
On a scale of 1-100 with 1 representing the highest level of pessimism and 100 representing the peak of optimism, business owners’ overall outlook is down six points since October (71/100), slipping to 65/100—the same number reported in July 2018.
Their confidence in the U.S. economy is down three points to 62/100 since October but remains two points above July’s results.
“Though optimism in a variety of areas is down from our last Business Sentiment Report, these results still reflect a positive outlook among business owners,” says Martin Mucci, Paychex President and CEO—in a press release. “The decline seen in these latest results are primarily around hiring and the ability to raise wages.”
Business owner sentiment on several other topics also saw a slight decrease since October, including:
- The ability to raise wages: down 10 points to 41/100
- The ability to make capital investments: down 9 points to 53/100
- The ability to fill open positions with qualified candidates today: down 8 points to 43/100
- Overall regulatory environment: down 3 points to 50/100
- Access to capital: down 1 point to 64/100
“This is the lowest level of confidence in employers’ ability to fill openings with qualified workers that we’ve seen since starting the Business Sentiment Report in July of last year,” Mucci adds. “While jobs growth remains steady, business owners are still having a hard time finding candidates with the right skillsets to meet their needs in today’s tight labor market.”
Paychex also asked business owners about their ability to survive a potential future economic recession. Responses were varied with 33% reporting they are not at all confident they could withstand a recession, 47% saying they are somewhat confident, and 20% feeling very confident.
To learn more about this report, click here.