The national economic situation has been hard on many small business owners in recent months and even as many may have wanted to increase hiring, they have largely been unable to do so. Meanwhile, many have recently been forced to resort to laying off workers as they continue to struggle to gain a foothold.
The index of net hiring and layoffs in the past year is down on a quarterly basis from the figures seen in January, indicating that in the past 12 months, more small businesses have let people go than brought new ones aboard, according to the latest Wells Fargo/Gallup Small Business Index for the first quarter of the new year. Interestingly, net hiring has remained at more or less the same level since the fourth quarter of 2010, and is up considerably from the same period a year before.
In all, just 11 percent of small business owners surveyed said that they've actually increased hiring in the past 12 months, and that figure was the same as the one observed both at the end of last year and on an annual basis as well, the report said. This lack of movement was also seen in the slightly less than one-quarter of owners who said that they've had to slash the number of positions they had in the last year.
On the other hand, owners' intentions for increasing hiring in the next 12 months ticked up very slightly, rising to a plus-6 rating from plus-5 at the end of last year, the report said. However, that was still down from the plus-10 observed in the same quarter a year earlier. This came after a significant dip last November, immediately following the presidential election, which saw intentions decline to a minus-4 rating.
"It may be argued that since early April, when this small-business survey was conducted, owner optimism has improved," wrote Dennis Jacobe, chief economist for Gallup. "That is, small-business owners could be more optimistic now than they were when they expressed slight optimism in this survey. At the same time, four in 10 small-business owners say they have held back on hiring, and one in five owners say they have let employees go, due to the healthcare costs associated with the Affordable Care Act."
Owners thinking of increasing hiring should consider the implications such a move would have for their small business insurance needs, as it might increase their premiums for general liability insurance and other policies.