Recently, I took a look National Federation of Independent Business (NFIB) data small business hiring to see what was going on with entrepreneurs’ hiring plans.
In its monthly survey of its members, the NFIB gathers two important statistics on this question: “job openings,” which measures the percent of companies with positions that they are currently unable to fill, and “hiring plans,” which measures the proportion of businesses that plan to increase hiring over the next three months minus the percentage that plan to decrease hiring over that period.
In the figure below, I have charted the trends in the two numbers.
Small Business Job Openings and Hiring Plans
Source: Data contained in National Federation of Independent Businesses’ Small Business Economic Trends, March 2009.
Both numbers are much lower now than at the beginning of 2008. (No surprise there.) But, from September 2008 through January 2009, future hiring plans fell much faster than current job openings.
It’s interesting to consider why. One explanation is that entrepreneurs were expecting their hiring to be lower in the future than it was when they were surveyed. Another explanation is that the constant bombardment of bad news has made entrepreneurs unduly pessimistic, and their beliefs are more conservative than their actions.
Either way, the slight uptick in hiring plans in February 2009 suggests a ray of hope. Maybe things are starting to improve.
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About the Author: Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool’s Gold: The Truth Behind Angel Investing in America ; Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By; Finding Fertile Ground: Identifying Extraordinary Opportunities for New Ventures; Technology Strategy for Managers and Entrepreneurs; and From Ice Cream to the Internet: Using Franchising to Drive the Growth and Profits of Your Company.