Small Business Hiring Up Across U.S. for First Time in 2014

Small businesses with primarily 1-10 employees, often referred to as micro businesses, saw a month-over-month increase in hiring (0.1 percent) for the first time in 2014, according to the August 2014 SurePayroll Small Business Scorecard. SurePayroll Inc., is a provider of online payroll services to small businesses.

The increase, though seemingly small, is significant considering that the Scorecard has reported small business hiring as flat to down month over month for a year. Year-over-year hiring is down 0.7 percent nationwide. Optimism among small business owners is also high at 70 percent. By comparison, optimism was only at 54 percent in August of 2010.

“It’s not a trend yet, but it’s a step in the right direction,” said SurePayroll General Manager Andy Roe on the hiring increase. “We’ve seen small businesses grow their profitability using technology and innovation, now hopefully we’re starting to see them grow their staffs a bit more.”

Independent contractors or 1099s, meanwhile, make up more than 6 percent of small business employees, as they have over the last year, more than double what it was 10 years ago, according to Scorecard data.

The Scorecard optimism survey in August found that 22 percent of small business owners are more likely to hire an independent contractor than a full-time worker. Less than 1 percent said they had a hard time finding qualified contractors for various jobs.

“What’s happening right now is you have a lot of skilled people available to do freelance on an as-needed basis. It allows small businesses to get some really good work from qualified people with very specific expertise, without having to pay the costs of having an employee,” said Roe.

On a regional level in August, hiring was up 0.3 percent in the South and 0.1 percent in the West. Hiring fell 0.1 percent in the Midwest and 0.2 percent in the Northeast. The average paycheck dropped 0.5 percent nationwide after being up in July. The average paycheck was down across the country this month: 0.5 percent in the Midwest; 0.6 percent in the Northeast; 0.3 percent in the South and 0.5 percent in the West. The average paycheck will sometimes fall as hiring rises, because there is less overtime paid to existing workers.

As the first economic indicator created by a payroll company, the SurePayroll Scorecard has provided a monthly look at national hiring and paycheck trends since October 2004. SurePayroll's Scorecard compiles data from small businesses nationwide, and exclusively reflects the trends affecting the nation's “micro businesses” — those with1-10 employees. The average business reflected has six employees.

The full SurePayroll Small Business Scorecard – Main Street Matters infographic includes data for SurePayroll’s top MSAs. The August 2014 Scorecard is available now on the SurePayroll blog.