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Fed Survey Finds Small Businesses Continue to Face Challenges Hiring, Retaining Workers

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Filling jobs was more difficult for small employers last year than the previous time that the United States was experiencing a similarly tight labor market, according to the Small Business Credit Survey 2022 Report on Hiring and Worker Retention.

The new report was issued today by the 12 Federal Reserve Banks. It examines workforce issues from the perspective of small businesses—those with between 1 and 499 employees—to provide additional analysis of the survey responses reported in the 2022 Small Business Credit Survey Report on Employer Firms. The report focuses on findings from the survey module on hiring and retention challenges, reflecting responses from 7,981 employer firms collected September through November of 2021.

Key Findings:

  • Firms were much more likely to say that hiring was challenging, as 44% of firms in the most recent survey said that hiring was “very difficult” compared to 27% of firms who said the same in 2018.
  • Among firms that reported hiring was somewhat or very difficult, 78% cited a lack of applicants as a reason.
  • A majority of firms that reported hiring challenges said they responded by increasing wages (59%) or by shifting more work to existing employees and the owner (55%).

Read the report: Small Business Credit Survey 2022 Report on Hiring and Worker Retention

About the Small Business Credit Survey (SBCS)

The SBCS collects information about business performance, financing needs and choices, and borrowing experiences of firms with fewer than 500 employees. These firms represent 99.7% of all employers.

Responses to the SBCS provide insight into the dynamics behind aggregate lending trends and about noteworthy segments of small businesses. The results are weighted to reflect the full population of small businesses in the United States. The SBCS is not a random sample; therefore, results should be analyzed with awareness of potential methodological biases.

The SBCS includes experiences from firms across all 50 states and the District of Columbia through collaboration of all 12 Federal Reserve Banks. In addition to the 10,914 firms with between 1 and 499 employees included in the report, the 2021 survey yielded 6,834 responses from nonemployer firms. These findings will be explored in a separate forthcoming report.

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