Help Wanted: Study Highlights Hiring Difficulties Among Small Businesses by City and State

In this Guide...

Nearly 1 out of 3 small businesses in America reported difficulties hiring new employees in April 2022. Our analysis of U.S. Census Bureau employment data reveals the states and cities where small businesses are struggling the most.

Two small business owners reviewing finances
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Key Findings

 

  • 30% of small businesses in the U.S. are having difficulty hiring new employees.

  • Nearly 45% of small businesses in Missouri and Vermont are having a hard time finding new workers.

  • More than 60% of small businesses in the accommodations and food services industry report difficulty hiring.

  • More than 44% of small businesses say they won’t be able to return to a normal level of operation within six months, if at all.
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Study Overview

Some are calling it the “Great Resignation,” others the “Great Reshuffle.” But no matter how you describe today’s job market, one thing remains true: Small businesses are having a hard time finding help. 

Nationwide, almost 1 out of every 3 small businesses reported having difficulty hiring new employees in the month of April, according to our analysis of data from the U.S. Census Bureau Small Business Pulse Survey. We broke the data down to reveal the states, cities and business sectors that are having the most trouble staffing in 2022. 

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States Where Small Businesses Are Facing the Most Difficulty Hiring

30% of small businesses nationwide reported difficulty hiring new employees during the month of April.

In Missouri and Vermont, nearly 45% of small businesses are having a hard time hiring workers, and six other states reported rates higher than 40%. The table below shows the percentage of small businesses in each state that reported difficulty hiring in April.  

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Small business hiring difficulty ranked by state

A number of states in the Rust Belt ranked among those with the greatest hiring difficulty facing small business owners, with Missouri, Wisconsin, Pennsylvania, Indiana and Michigan all cracking the top nine of the list.

West Virginia (9.5% lower than the national average), New York (7.7% lower) and Kentucky (5% lower) were among the Rust Belt outliers. Small businesses in Mississippi reported the least trouble hiring new workers in April, with a rate that was 15% better than the national average.   

All told, 39 states, the District of Columbia and Puerto Rico reported rates of small business hiring difficulty that exceeded the national average.

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Metro Areas With The Most Difficulty Hiring Among Small Businesses

Dozens of metro areas throughout the U.S. are having an exceptionally difficult time hiring new workers. 

Missouri ranks as the state with the most small businesses facing hiring struggles, and the city of St. Louis reports the highest rate among all metro areas in the U.S.

46% of small businesses in St. Louis had trouble hiring new employees in April. The 46% rate was slightly higher than that of the Detroit/Warren/Dearborn area of Michigan and Jacksonville, Florida. 

The chart below shows the metro areas with the most small businesses reporting difficulty hiring workers in April.       

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Hiring difficulties by metro area

Some cities are seeing small business hiring difficulty rates far higher than their respective state average.

  • Florida ranked 23rd among states facing hiring struggles, at 33.9% of all small businesses. Jacksonville ranked third among all metro areas in the nation, however, at 45%, and Tampa was close behind (40.8%).

  • Texas’ rate of 30.5% was roughly on par with the national average, but the metro area of Austin/Round Rock/Georgetown ranked fifth for all metro areas, at 42.1%.

  • 30.9% of small businesses in California reported trouble hiring new workers, but in the Sacramento/Roseville/Folsom area, the rate was 40.3%. 
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Business Sectors With Highest Reported Hiring Difficulty Rates

The hiring difficulties among small businesses are not spread out equally among sectors.

Unsurprisingly, following the worst of the coronavirus (COVID-19) pandemic, the accommodation and food services industry has had the most trouble finding new workers, with more than 60% of such businesses reporting hiring difficulties in April 2022.

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Pessimistic Outlook for Many American Small Business Owners

Running a small business is a challenge when you can’t find enough sets of hands. The current staffing shortage faced by many businesses may be charting a tough road to recovery.

Across the U.S., 44% of small businesses say they will need at least six months to return to normal operating levels, if they ever get back there at all. 

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Poor future outlook for small business owners by state

Topping the list is Hawaii, where more than 52% of small businesses say they may never return to their normal operating levels and if they do, they expect it to take at least six months.

California, Georgia, New Mexico, New York and New Jersey reported around half of their small businesses were in a similar predicament. 

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Discussion

Difficulty hiring new employees can be best explained by a job market that has more than twice as many open positions as unemployed people. As of the end of March 2022, there were a record five million more job openings than unemployed people.  

A near-record low unemployment rate of 3.6% hasn’t left many job seekers available, and more than three million Americans retiring early because of the pandemic likely hasn’t helped. 

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Conclusion

Many small businesses throughout the U.S. are having a hard time filling open positions. And those staffing shortages could be putting the future of the business in jeopardy. 

A low unemployment rate, an exodus of early retirees because of the pandemic and a record number of more open positions than unemployed people may all be partly to blame.

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Resources and Programs for Small Businesses

The Small Business Administration offers several programs to small businesses that were affected by the COVID-19 pandemic. SBA loans could be of use for small business owners during a staffing shortage. 

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Methodology

The data used for this report came from the U.S. Census Bureau’s Small Business Pulse Survey, specifically Phase 8 data last updated April 21, 2022.

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