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For Small Businesses, Hiring Slump Continues

For Small Businesses, Hiring Slump Continues


The slump in small business hiring is now in its third month, a new survey shows. Low consumer demand and slow economic growth are causing hesitant business owners to think twice about hiring new employees.

Hiring among companies with 300 or fewer employees slipped by .81 percent last month, following a decrease of .36 percent in August, according to a jobs survey conducted by CBIZ Payroll Services. The survey drew from data provided by 3,000 companies.

The data in this survey, however, is refuted by a similar survey on small business hiring by Intuit that showed an uptick in job creation. The Intuit survey is based on aggregate and anonymous online employment data from approximately 70,000 small business employers, each with fewer than 20 employees.

Of the companies that were surveyed by CBIZ, 26 percent reported a decrease in employee headcount while 26 percent increased staffing. Nearly half (48 percent) of the companies involved in the survey maintained their current number of employees.

The stagnation in small business hiring runs counter to the overall trend of slight growth in overall employee headcount. ADP's September small business employment index showed that the private sector added 91,000 jobs that month, slightly higher than the 89,000 jobs added in August and surpassing analyst estimates.

Business owners are likely to keep an eye on consumer spending in the fourth quarter as the holiday season begins to pick up.

Consumer demand and the overall economic malaise that permeates most of what Americans are seeing and hearing are the primary contributing factors around the lack of employment growth, said Philip Noftsinger, a CBIZ business unit president. Until confidence rises among small business owners and consumers, results like September's are likely to continue into the foreseeable future.

"As we enter the fourth quarter, it will be interesting to see if traditional holiday season demand can outweigh a conservative consumer, and lead to increased employment numbers," Noftsinger said. "Today, both forces appear to be in equal balance resulting in a neutral state. Hopefully the added pressure of what is historically a high selling season for retailers will provide enough pressure to create some movement in terms of consumer demand.