Small Business Hiring Slows in September, NFIB Says

TL;DR: Small business hiring slowed again in September, according to NFIB. Just over half of owners were hiring or trying to hire, down five points from August. However, worker shortages remain a problem, with 45% of owners saying they found few or no qualified applicants.

Small business hiring slowed in September as employers grew more cautious, but finding workers with the right skills remains a major problem, according to a new report from the National Federation of Independent Business.

The NFIB September Jobs Report found that 32% of small business owners had job openings they could not fill. That was down three points from August but still eight points above the long-term average.

The report adds to signs that the U.S. job market is cooling after years of tight labor conditions.

“Overall employment conditions are softening, though the small business labor market is still tighter than normal,” NFIB Chief Economist Bill Dunkelberg said. “Between the ongoing difficulty of finding qualified workers and elevated operation costs, employers are proceeding more cautiously as they look to make hiring decisions.”

NFIB's Small Business Employment Index fell 1.2 points in September to 100.6. That puts the index below its 2025 average of 101.2, though it remains just above its long-term average of 100.

The drop continues a trend seen in August, when the index slipped from 102.1 to 101.8 and fewer owners reported open jobs or plans to add workers, according to NFIB's August jobs report.

The September numbers show a clear pullback in hiring activity.

Just 51% of small business owners said they hired or tried to hire during the month. That was down five points from August.

But employers who are looking for workers are still having trouble finding them.

Forty-five percent of all owners — or 87% of those hiring or trying to hire — reported finding few or no qualified applicants. Twenty-five percent said they found few qualified workers, while another 20% said they found none.

The shortage was most clear among skilled workers. Twenty-seven percent of small business owners reported openings for skilled jobs, down four points from August. Openings for unskilled workers rose three points to 16%.

NFIB State Director Rosemary Elebash said the national findings mirror the problems faced by employers in Alabama.

“Fewer businesses may be hiring, but those that are say that finding the right person for the job is still a challenge. Small business owners need people with the skills to help them serve customers and keep their businesses running.”

Workforce issues have been a long-running concern for Alabama employers. Earlier this year, NFIB Alabama identified workforce development as one of its top priorities for the 2026 legislative session, with Elebash pointing to the State's low labor-force participation rate and the difficulty businesses face finding qualified applicants.

The September report suggests those concerns have not gone away even as hiring demand cools.

The share of owners who named “labor quality or availability” as their top business problem jumped three points to 26%. That is more than twice the historical average of 12%.

Labor costs, however, appear to be easing as a top concern. Six percent of owners named labor costs as their most important problem, down one point and the lowest reading since December 2020.

Pay pressure also eased somewhat.

A seasonally adjusted net 28% of owners said they raised compensation in September, down three points from August. At the same time, a net 20% plan to raise pay during the next three months, up two points.

Hiring plans have not collapsed. A net 17% of owners still plan to create jobs during the next three months, unchanged from August.

The NFIB numbers also come as other measures show a mixed but slower U.S. labor market. ADP reported Wednesday that private employers added 90,000 jobs in September. That was stronger than the 38,000 private jobs ADP reported for August, but still points to a much cooler pace of hiring than was common during the post-pandemic labor boom.

For small businesses, the NFIB report paints a somewhat unusual picture: employers are becoming more reluctant to hire, but those who do need workers are still struggling to find people with the skills they want.

That leaves Main Street caught between a softer economy and a labor pool that, at least for many small firms, remains tight.

NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals, for more than 80 years. NFIB is nonprofit, nonpartisan, and member-driven. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses, and remains so today. For more information, please visit nfib.com.