What’s the Story With Small Business Hiring?

What’s the Story With Small Business Hiring?If you’re like most small business owners, you could really use some extra help around the office right now. But are you ready to hire full-time employees? With all the uncertainty about tax issues, health insurance reform and the economic recovery itself, probably not.

Several recent surveys of small business owners paint the same picture: Entrepreneurs are eagerly waiting for the moment when the economy signals “All is well” and they feel confident enough to start placing those want ads.

In fact, an encouraging number of small business owners have already done so. According to the most recent Intuit Small Business Employment Index, small companies (defined as those with fewer than 20 employees) added 40,000 new jobs in July. That continues a growth trend that began in 2009; since last October, small companies have added 330,000 jobs.

The July figures were a slight decline from June’s revised estimate of 45,000 jobs. However, both wages and hours grew, by 0.7 and 0.9 percent respectively.

“It appears that small businesses are busy and need additional help, but are asking their existing people to work more hours rather than hiring more people,” says Dr. Susan Woodward, the economist behind the survey.

Meanwhile, in the latest Business Confidence Survey by Administaff, 78 percent of respondents cited the economy as a top concern—one that’s figuring into their hiring plans. But despite their uncertainty, some businesses in the survey are moving forward with hiring. Asked about their staffing plans for the remainder of 2010, 31 percent said they plan to hire, 60 percent expect to keep staffing at the same level, and 9 percent plan to lay off employees.

Numbers from job search site CareerBuilder echo Administaff’s findins. When CareerBuilder asked small and midsized businesses (with 500 or fewer employees) about their hiring plans for the second part of 2010, 32 percent of companies said they plan to hire. Of that group, 21 percent expect to hire full-time workers, 11 percent plan to hire part-time workers and 6 percent said they plan to hire temporary workers or independent contractors.  T

The figure for the smallest companies (those with 50 or fewer employees) was a little smaller: 24 percent of these plan to hire in 2010.

These figures aren’t terrible news, but they aren’t great, either. To me, they paint a picture of business owners who are stalled at the gate. Like racehorses champing at the bit, they’re itching to be able to hire, move forward and grow their companies—but economic uncertainty is holding them back.

As Paul J. Sarvadi, chairman and CEO of Administaff puts it, “Many owners of small and medium-sized businesses seem to be hesitant to hire more workers and commit important financial resources in the face of current economic uncertainty. However, they appear to be ready and willing to make those positive decisions as soon as key fiscal elements are in place.”

Here’s hoping it doesn’t take much longer.


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.

5 Reactions
  1. Our problem hasn’t been that the economy has been prohibitive for hiring. My problem has been, trying to find the right “fit”. Trying to find staff who really, truly understand the value propositions of our services, and who can communicate that effectively to clients and prospects. Our problem now is finding sales staff who can determine prospects’ super-objective, and sell them the correct “benefit” that correlates to that super-objective. We’ve also had difficulty in finding staff who both have a stakeholder mentality AND understand the principles of submitting to authority.

  2. @slashcareer – finding employees with a stakeholder mentality AND submit to authority will always be hard, but they are worth a lot if you do find them.

    As for the general topic, hiring is a big commitment in time, effort and money. I totally understand why SMBs are being conservative. Not to mention the red tape involved with adding full-time employees.

  3. we cant hire between workmans comp and unemployment insurance yadda yadda we barrly make it with just us. then our employes r still collecting unemployment after he was asked to come back and then reported him to unemployment he is working under the table and collecting off us. just to much for the self employed

  4. It’s true that it is difficult for small businesses to take that step and commit to full-time employees. I have a few friends who own small businesses and they are hard pressed to make a decision. They will try, as long as possible, to hire people temporarily or contract them in. On the other hand, that does not let the temps build enough loyalty towards the company and it’s all just fishier than engaging in a regular job.
    I hope the rules of the game are clarified soon so that all North American business can grow with a feeling of relative safety.