By Maria Valdez Haubrich
Is your small business getting ready to hire? Looks like plenty of them are. Small business created about 65,000 new jobs in March—the highest single-month growth rate in more than two years, according to the Intuit Small Business Employment Index, which measures employment trends among businesses with 20 or fewer employees.
The March Index showed small business employment increasing at an annual growth rate of 3.8 percent. The average monthly hours worked also rose by 0.5 percent, or 36 minutes, and average monthly compensation increased by 0.7 percent, or $18 per worker, to $2,785 in March or about $33,400 per year.
“This is the strongest small business employment report we have had in a long time,” said Susan Woodward, the economist who works with Intuit to create the Index. “Yet at the same time, the hiring rate has remained flat at just above 5 percent since May 2009.”
Woodward says this indicates that small business employees are staying with their current employers, rather than leaving for bigger firms. In the typical economy, the turnover at small firms is higher than at larger ones because small companies usually pay less. But Woodward says the turnover rate is still lower than normal, indicating “we are not out of the woods yet.” The compensation figures, too, indicate many employees at small businesses are still working only part-time.
Still, the positive numbers continue a trend that Intuit has been seeing for several months. February’s small business job growth rate was 0.4 percent, or 75,000 jobs added at small businesses that month, and January also saw 0.4 percent growth. In fact, jobs, hours worked and compensation have all been climbing steadily since last July.
Overall this month, job growth was strongest in the Mountain, West South Central and East South Central regions of the country, along with the Pacific Northwest. Woodward says hiring is also beginning to pick up in New York.
Image by Flickr user bpsusf (Creative Commons)