Small Business Hiring: Things Are Finally Looking Up

With large companies not stepping up to the plate as “job creators,” small business owners have been under a microscope, with polls and surveys monitoring our hiring actions and intentions as closely as Punxsutawney Phil gets watched on Groundhog Day.

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For what seems like eons, there’s been little change in small businesses’ intent to hire. But now, it looks like we can finally see some light at the end of the tunnel. A recent Gallup/Wells Fargo poll pegs small businesses’ plans to hire as the best they’ve been since January 2008—that is, back before the recession began.

Nearly one-fourth (22 percent) of the small business owners told Gallup they plan to increase the total number of jobs at their companies over the next 12 months; only 8 percent expect that number to decrease.

More good news: Small businesses have shown great reluctance to commit to full time employees during the recession. But in this latest poll, preferences have shifted back to where they were pre-recession. Slightly more than one-fourth (26 percent) of small-business owners say they would prefer to hire full time employees, 36 percent say they would prefer part-time employees and 36 percent said they would prefer to add temporary or contract workers. Those are the same preferences as in January 2008.

Gallup’s positive findings are echoed by the latest Citibank small business survey, which shows small business owners’ hiring intentions at the highest they’ve been in two years. Over 25 percent of the small businesses surveyed intend to increase their permanent full time employees this year. That’s a 12 percent increase from January 2011 and a 9 percent increase in the last six months. In addition, 22 percent plan to bring on full time workers on a seasonal basis.

The majority (71 percent) of those surveyed in the Citibank report plan to keep their workforce the same size, but that doesn’t mean their outlook is negative. Forty-four percent say they’ll work longer hours themselves, and 40 percent expect their current employees to be more productive—all good signs that business is picking up, even if hiring plans haven’t yet kept pace.

But are small business hiring plans just pie in the sky? Small business owners in the Gallup poll were significantly more negative when asked to reflect on how much hiring they actually did in the past year. In 2011, about 22 percent decreased jobs while 13 percent increased them. The Gallup report says:

“Since the 2008 global economic collapse, the net percentage of small-business owners’ self-reported actual job growth versus job cuts has generally remained negative, even when small-business owners say they are more likely to grow than contract.”

I don’t think these plans are pipe dreams, but I do think small businesses are waiting for the right time to commit to hiring. The results of the Citibank survey back me up: Overall, small business owners are confident, with 87 percent saying they think 2012 will be better than or the same as 2011. Nearly half say they are “poised to grow when conditions are right.” And another 33 percent believe their businesses will be growing rapidly or moderately in 2012.

Are you as confident as the business owners in these surveys? Are you going to back up your optimism by hiring?

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Rieva Lesonsky Rieva Lesonsky is a Columnist for Small Business Trends covering employment, retail trends and women in business. She is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her blog, SmallBizDaily, to get the scoop on business trends and free TrendCast reports.