Small Business Pay Plans Climb Amid Hiring Gap
Owners budgeting for staff should expect continued wage pressure as qualified applicants remain scarce.
Updated on Nov. 6, 2026 in Employment
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Small business hiring rose in October 2026, according to NFIB survey data, with 56% of owners reporting they were hiring or trying to hire, up 5 points. Owners planning to create jobs rose to 18%, while compensation plans also firmed for operators weighing staffing budgets.
Why it matters
The rise in hiring intent and compensation plans signals that labor scarcity remains a binding cost pressure for small firms. With 48% of owners reporting few or no qualified applicants, wage decisions are increasingly driven by the difficulty of filling roles rather than by hiring demand alone.
Survey data from NFIB shows 36% of owners reported unfilled openings in October and 48% reported few or no qualified applicants. The Small Business Employment Index stands at 100.8, slightly below its 2025 average of 101.2 but above its historical average of 100.0.
The players
National Federation of Independent Business (NFIB)
A national small business advocacy organization that surveys owners monthly on hiring, compensation, and operating conditions.
The details
NFIB's jobs report draws on surveys of small business owners to measure hiring plans, openings and pay decisions. The Small Business Employment Index tracks the current state of the small business labor market and rose 0.2 points in October. Owners citing labor quality or availability as their top operating problem fell to 25%, down 1 point from September, even as a net 24% planned compensation increases over the next three months.
Timeline
October 2026: small business hiring and compensation activity increased, per the October NFIB survey.
Next three months from October 2026: owners plan further compensation increases.
2027: Oregon legislative session where business environment priorities are expected to be set.
Market Landscape
The Small Business Employment Index at 100.8 sits above its historical average of 100.0 but below its 2025 average of 101.2, a pattern that places current hiring conditions between long-run norms and last year's tighter market. Compensation plans rising to a net 24% over the next quarter suggest employers are responding to the same scarcity that keeps 48% of owners short of qualified applicants.
Owners should budget for continued upward pressure on wages, since a net 24% plan to raise pay over the next three months and labor availability remains a top concern. Recruitment costs and time-to-fill should be factored into staffing plans given that 36% of owners report openings they cannot fill.
The takeaway
Small firms face persistent labor scarcity alongside rising pay expectations, so compensation and recruiting budgets should be reviewed against current conditions. Operators should track the next NFIB monthly release to see whether hiring intent converts into realized job creation.
What happens next
Oregon legislators are expected to take up business environment priorities at the 2027 Oregon legislative session, a date operators in the state should track for policy changes affecting hiring and compensation costs.
Further reading
For broader context on how these trends fit into national labor patterns, explore Employment coverage on We are Main Street.
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