Small Business Takes Another Step Forward

Over the past several months, many small businesses were pinched a little bit by the slow economy brought on by the harsh winter weather in many parts of the country. However, with those issues largely canceled out by the arrival of spring, it seems that many small business owners across the country are now taking the step to increase hiring and pay their workers more.

In the month of April alone, small businesses across the country added some 25,000 jobs, and the amount of monthly compensation employees earned increased 0.06 percent, or $2 per worker, according to the latest Small business Employment and Revenue Index from Intuit. Moreover, the number of hours employees of those companies worked, on average, increased 0.05 percent, or just three extra minutes per month.

“This month’s employment increase comes after three successive months with little-to-no small business employment growth. In fact, it’s the fastest rate we’ve seen over the past year,” said Susan Woodward, the economist who works with Intuit to create the indexes. “Despite this growth, these figures do not paint an optimistic picture. We still have an economy with high unemployment. The hiring rate remains low, and has hardly budged from the low rate to which it fell in April of 2009. Job turnover in the entire economy, not just small business, remains below the levels seen before the beginning of the recession.”

What does the data mean?
Overall, the average small business employee earned $2,741, which equates to $32,900 per year, the report said. Moreover, hourly pay was largely unchanged at $15.90 per hour, marking the third straight month in which workers earned that much. However, it should be noted that both of these figures include the amount of money small business owners pay themselves.

Meanwhile, on a geographic level, improvements in hiring were not uniform, the report said. Each of Hawaii, Kentucky, Nevada, and Virginia tied for the largest step forward in this regard, as employment increased 0.3 percent for each in the month of April. Of the other 46 states, only Minnesota actually lost small business jobs, as employment there fell 0.03 percent.

Owners who want to bring on more workers, or increase pay for their existing employees, might want to consider the ways in which they can cut their costs, such as by finding more affordable small business insurance. Cutting costs for liability insurance, for instance, could reduce expenses by thousands of dollars per year.