Recent research from the Wharton School, in collaboration with Accenture, helps explain why this issue has proven so persistent.

The Labor Market Has Shifted to Skills

The January 2026 Wharton–Accenture Skills Index shows that the labor market has moved from a role-based system to a skills-based one. Job titles still dominate hiring conversations, but they no longer reflect how work actually gets done. As a result, many candidates emphasize broad, widely accepted traits such as communication, leadership, and problem-solving. These skills are not unimportant, but they are now so common that they no longer differentiate candidates.

Where the Mismatch Appears

At the same time, employers consistently struggle to find execution-critical capabilities. Skills tied to operational expertise, technical depth, compliance, and execution-level management appear more often in job postings than in worker profiles. These are the skills required to move work from intent to outcome, yet they remain undersupplied.

Why Labor Quality Remains a Top Concern

This imbalance signals a growing gap between how skills are presented by candidates and how work actually gets done by the employer. It also helps explain why labor quality remains such a persistent concern. According to the National Federation of Independent Business (NFIB) December 2025 survey data, labor quality is the second most frequently cited concern among small business owners.

Part of this challenge lies in how candidates think about presenting their experience. As the labor market becomes more skills-based, continuing to highlight broad traits can limit alignment. Clearer signaling of operational, technical, and execution-level skills could improve hiring outcomes and mitigate some of the perceived labor shortage.

In our next post, we will explore what small businesses can do differently to adapt to a skills-based labor market without increasing headcount or payroll risk.

The post Why the Labor Problem Isn’t Going Away for Small Businesses appeared first on Strategic Thinktank, Inc. | Your SMB Experts | Consulting services for small and mid-sized businesses.

The Dual Nature of the Crisis

Small business owners face two interconnected problems that have persisted for over five years. This past July, 36% of businesses reported having job openings they cannot fill, representing levels 44% above the historical average of 25%. Simultaneously, 48% of businesses report having few or no qualified applicants for their open positions.

This isn’t simply about worker availability. The data shows that even when applicants exist, nearly half of businesses find them inadequately qualified. During the peak crisis years of 2021-2022, the percentage of businesses with unfilled positions reached 46-47% while qualified applicant shortages affected 55-56% of businesses.

The Structural Nature of the Problem

The persistence of both metrics suggests this small business labor shortage reflects deeper structural changes in the workforce rather than a temporary disruption. Both job opening rates and qualified applicant shortages have remained consistently elevated throughout the five years, with no clear trajectory toward historical norms.

The data shows that July 2025 levels, while improved from peak crisis years, still represent significant departures from pre-2020 baselines. This indicates that the labor market disruptions that began in 2020 have not resolved despite economic recovery in other sectors.

The combination of widespread unfilled positions and persistent applicant quality concerns suggests small businesses face challenges that extend beyond traditional supply and demand dynamics in the labor market.

What Can Be Done?

How might small businesses address these persistent dual challenges?

Consider whether internal training programs can develop the necessary skills rather than competing for scarce, qualified candidates.

Investigate partnerships between trade associations and local educational institutions to help build the industry-specific talent pipelines needed for sustainable workforce solutions.

The data clearly indicate that traditional hiring approaches have proven insufficient for five consecutive years; strategic workforce development may be the path forward.

The post Small Business Labor Shortage: The 5-Year Crisis That Refuses to End appeared first on Strategic Thinktank, Inc. | Your SMB Experts | Consulting services for small and mid-sized businesses.