Survey: Labor Shortages, Supply Chain Disruptions Impact Small Businesses

Small Business

Labor shortages and supply chain disruptions are the major challenges impacting small business recovery from pandemic-related shutdowns and restrictions according to a new survey.

Released July 12, the NFIB survey measures the impact of the pandemic on the nation’s small businesses.

Just 22% of those surveyed reported that business conditions “were back to normal,” with 27% saying it will take until the second half of this year before operations return to pre-pandemic levels.

Twenty-two percent forecast that milestone occurring in the first half of 2022, 17% don’t expect a full improvement until the second half of next year, and 13% say after 2023.

Almost three-quarters (73%) of small businesses report they can maintain operations for more than 12 months in current economic conditions, with a seven-to 12 month window for 15%, and six months or less for 12%.

Staffing Shortages

Significant staffing shortages are impacting 22% of surveyed small businesses, while 18% report moderate labor shortfalls.

Of those small experiencing staffing shortages, 19% report a significant loss of sales opportunities and 30% a moderate loss.

Almost half are receiving fewer job applications for open positions than a month ago.

Almost half (48%) of small employers are receiving fewer job applications for open positions than a month ago and 39% are receiving the same level.

To adjust to the labor situation, 63% of small businesses increased wages, 15% offer enhanced referral bonuses, 15% improved health insurance benefits, 13% expanded time off policies, and 13% provide higher hiring bonuses.


To compensate for the lack of workers, businesses are making the following adjustments:

  • 41% offer more hours to part-time employees
  • 60% offer overtime to full-time employees.
  • 79% of owners are working more hours and 30% adjusted business operation hours
  • 29% percent introduced new technology to enhance productivity
  • 24% reduced the variety of goods and services

Twenty-nine percent introduced new technology to enhance productivity.

“Small businesses are making adjustments to their hiring practices to attract qualified applicants as well as adjusting business operations to compensate for the lack of staff,” said Holly Wade, executive director of NFIB’s Research Center.

“Small businesses are still recovering from the pandemic but need to fill open positions in order to get back to full productivity.”

Supply Chain

Thirty-two percent reported that supply chain disruptions significantly impact operations, with 54% saying that impact worsened over the last three months.

Over half (62%) of small business leaders expect those disruptions to continue for five or more months.

More than half say the impact of supply chain disruptions worsened over the last three months.

Other findings:

  • 77% received a Paycheck Protection Program loan in 2020
  • 86% submitted a PPP loan forgiveness application for that loan
  • 43% received a second PPP loan and only 20% applied for forgiveness on that loan
  • 9% claimed the Employee Retention Tax Credit for wages in 2020 and 7% claimed it for 2021 salaries
  • 58% of owners are not familiar with the ERTC program
  • About a quarter (26%) applied for and received an Economic Injury Disaster Loan
  • 15% claimed the federal COVID-19 sick and family leave tax credit
  • 29% had a fraudulent unemployment insurance claim filed against their business
  • Almost one-in-five (19%) of small employers ask employees if they are vaccinated

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