The July jobs report from the National Federation of Independent Business shows hiring pressure easing for small firms, but the market for qualified workers stays tight. Thirty-three percent of owners reported job openings they could not fill, down three points from June and the lowest reading since December 2020, yet still eight points above the historical monthly average of 25 percent.
For builders, the report works as a temperature check on their own recruiting. The pattern of unfilled positions and thin applicant pools matches what construction firms describe on the ground, and the same construction-focused job boards that surface candidates for hard-to-fill roles show just how competitive the market has become.
The details matter more than the headline. Twenty-one percent of owners called labor quality their single most important problem, up five points from June and the largest monthly increase since August 2022. Fewer firms raised pay in July, and the share planning new hires ticked up. Each number changes the math on how a shop recruits, trains, and keeps people.
Builders should read the report twice, once for the national trend and once for what it implies about their own shop. The 33 percent figure sets the baseline for how hard every firm in the country is fighting for workers, while the local numbers, the trades you hire from, and the pay you offer determine whether you win. Pair the report with your own applicant tracking: how many calls each ad produces, how many candidates show up to an interview, and how many accept an offer.
What the July Jobs Report Shows
The NFIB Jobs Report surveys small business owners each month about openings, hiring activity, applicant quality, and compensation. Fifty-seven percent reported hiring or trying to hire in July, down one point from June. Of that group, 84 percent said they found few or no qualified applicants, which works out to 48 percent of all owners, down two points. Twenty-nine percent reported few qualified applicants and 19 percent reported none at all.
| Metric | July reading | Change from June |
|---|---|---|
| Openings owners could not fill | 33% | -3 points |
| Labor quality as top problem | 21% | +5 points |
| Hiring or trying to hire | 57% | -1 point |
| Few or no qualified applicants | 48% | -2 points |
| Openings for skilled workers | 29% | -1 point |
| Openings for unskilled labor | 12% | -1 point |
| Net raising compensation | 27% | -6 points |
| Net planning new jobs | 14% | +1 point |
| Labor costs as top problem | 9% | -1 point |
Two applicant pools, one problem
The report splits openings into skilled and unskilled. Twenty-nine percent of owners had openings for skilled workers, down one point, while 12 percent had openings for unskilled labor, down one point. The skilled figure is the one builders should watch: a skilled opening that sits unfilled stalls production, while an unskilled opening can often be covered by training up a motivated hire.
What the easing trend does not say
A three-point drop in unfilled openings sounds like relief, but the reading is still eight points above the historical average. The share of owners calling labor quality their top problem jumped five points in the same month, so the applicant pool is not growing as fast as the headline suggests.
The cost side of hiring
Pay is only part of the package a builder offers. Benefits ride on top of wages, and for small shops those costs cut deep; healthcare costs are the top business challenge for small home builders in many regions. When owners price the full loaded cost of a hire against the value the person adds, the gap explains why positions stay open instead of being filled with a marginal candidate.
Skilled Workers Are the Bottleneck
Job openings were highest in construction, wholesale, and transportation, and lowest in finance and agriculture, according to the July report. Construction leading the list is no surprise: the trades lean on workers whose skills take years to build, and retirements remove experienced people faster than training replaces them.
How technology changes the skills builders need
When labor is scarce, owners substitute equipment and software for people. The pattern shows up across the industry; research on net-zero construction found that the technology to achieve net-zero energy is available for most building types, but cost and education remain challenges. A firm that adopts new tools trades a shortage of manual labor for a shortage of people trained to run the gear, so the education piece has to be budgeted alongside the purchase.
What a tight skilled pool does to schedules
Unfilled skilled openings push project timelines out and force owners to turn down work. The practical response is to line up subcontractors early, hold open slots for the workers you already have, and price bids with realistic lead times instead of assuming the crew will grow.
A second option is to restructure the work itself. Prefabricating wall panels, roof trusses, and subassemblies in the shop moves hours off the critical path and lets a smaller crew finish more square footage. Builders who break jobs into smaller, repeatable tasks can also hire for narrower skills, training a laborer to run one machine well instead of waiting for a journeyman who can do everything.
Compensation Pressures Are Cooling
The pay side of the report moved the same direction as openings. A net 27 percent of owners raised compensation in July, down six points from June, and a net 17 percent plan to raise compensation in the next three months, down two points. Labor costs as the single most important problem fell one point to 9 percent.
Pay raises versus retention
Smaller pay increases do not necessarily mean easier hiring. They mean owners are holding the line on wages while the applicant pool stays thin, a position that works only when retention is solid. Turnover forces a shop back into the same expensive market.
One useful benchmark is your own turnover rate against the construction industry norm of roughly 20 percent a year. If yours runs higher, the wage line may not be the problem; the onboarding, the safety culture, or the schedule could be. Fixing retention costs less than re-hiring, and it shows up on the same compensation line the NFIB tracks.
Planned hiring over the next quarter
A seasonally adjusted net 14 percent of owners plan to create new jobs in the next three months, up one point from June and above the historical average of net 11 percent. For builders that points to modest crew growth ahead, which makes current recruiting efforts worth protecting.
Equipment that shrinks the crew you need
Capital can substitute for labor in the right spots. One small earthworks contractor used grade control technology to transform a struggling operation into a thriving business with a leaner crew, and the same logic applies on the building side: machines and software that remove rework cut the hours a job needs and reduce the number of hires required to keep pace.
Where Openings Run Highest
Construction, wholesale, and transportation topped the list of industries with unfilled openings in July, while finance and agriculture reported the fewest. For a builder, the comparison explains who you compete against for workers: not just other builders, but distribution yards and freight companies offering steady hours.
Why construction leads the list
A few factors push construction to the top:
- Project work is lumpy, so crews staff up and lay off with the weather and the bid calendar.
- Skilled trades take years to learn, so the training pipeline lags demand.
- An aging workforce retires experienced hands faster than programs replace them.
Protecting the business while positions stay open
A hiring shortfall tests cash flow and project commitments. The business practices that protect a contracting business from financial failure start with realistic scheduling and disciplined payment terms, because an understaffed shop that overcommits on timelines turns a labor problem into a money problem.
Hiring Strategies When Applicants Are Scarce
The report’s core message is that owners cannot wait for the market to fix itself. With 48 percent of hiring owners facing few or no qualified applicants, the firms that fill positions are the ones that change how they recruit.
Seven strategies that hold up
Builders have tested a short list of tactics that consistently produce better hires. The seven hiring strategies to avoid bad construction employees and protect your business cover the full cycle, from the job ad to the first ninety days:
- Write precise job descriptions that name the actual tasks and tools.
- Screen with structured questions tied to the work, not generic interviews.
- Check references and verify past project claims before an offer.
- Run a paid trial day so both sides test the fit.
- Set clear expectations on hours, travel, and safety rules in writing.
- Pay at or above the local market rate for the specific trade.
- Follow a set onboarding checklist for the first weeks.
The paperwork that follows a hire
Builders who grow their crew usually grow their customer base too, and the paperwork has to keep up. The FTC click-to-cancel rule changes how subscription and recurring payment clauses must be written, so shops that sell maintenance plans or storage agreements should review their contract language before the next hiring wave lands.