Small Businesses Nationwide Continue Hiring Efforts, Though Slowly

In recent months, many small businesses have seen a larger amount of financial success and good feeling that has, in turn, led them to increase their hiring efforts substantially. That trend continued into April, though there were some troubling signs for workers at those independent firms.

The amount of hiring by small businesses rose very slightly – by 0.11 percent – in April, as these companies added some 20,000 new jobs across the country, according to the latest Small Business Employment and Revenue Indexes from Intuit, Inc. That brought the annualized rate of growing to 0.9 percent. Of the 36 states tracked by the survey, Utah had the highest hiring rate over the course of April, rising 0.3 percent, while the next-closest state was Idaho at 0.2 percent, and Michigan rounded out the top three at 0.18 percent. However, three states (Arkansas, Louisiana and New Mexico), all saw their hiring rates decline 0.1 percent. Pennsylvania and Connecticut were the only two other states not to report gains, as they held steady for the month.

"Small business employment continued its tepid growth trend in April, and geographic differences continue to be dramatic," said Susan Woodward, the economist who worked with Intuit to create the indexes. "Though Utah leads the pack in April's employment gains, the West South Central census division, dominated by Texas, has been leading the recovery overall, reaching nearly the same level of employment as in mid-2008. Texas' unusual mortgage law, which limited refinancing, may have spared the state from the worst of the defaults and the consequent decline in house values."

These changes came even as businesses generally saw less revenue for the latest survey, which covered the month of February, when they slipped 0.4 percent across all small businesses, the report said. While construction saw incoming funds increase 0.17 percent, all other industries saw them decline, with real estate, rentals and leasing slipping the most, by 1.2 percent. Others, like retail trade, professional, scientific and technical services, and accommodation, food services and drinking places, saw large declines a well.

Salaries, hours decline for workers
Perhaps as a result of these drops in revenues, the amount of hours worked by employees at small businesses nationwide took another serious hit, as did the amount of money they were paid, the report said. In April, the total amount of hours worked by employees at small businesses slipped to an average of 104.9 hours, down from 105.7 the month before. That comes out to the average employee working about 24 hours per week. Unfortunately for these workers, average hours have been on the decline since the middle of 2011, and at this point now stand below those observed in 2009, when the recession was just coming to an end.

Meanwhile, the average amount of monthly pay earned by these employees fell 0.4 percent, to a total of $2,676 in April form March's $2,685, the report said. That comes out to roughly $32,100 per year, and is considered to be pay commensurate with part-time work for close to two out of three small business employees examined.

Independent business owners obviously have to consider many things in the course of running their companies' day-to-day operations, and one consideration that could be particularly costly is small business insurance. Some studies have shown that the cost for workers' compensation insurance, which is generally vital to companies, is rising appreciably, and could create many problems for those businesses trying to keep their expenditures limited as they try to increase the size of their operations.