Small business owners are hiring junkies
With all the doom and gloom out there about the jobs outlook, small businesses appear to be thumbing their noses at economists and reporters like me.
I did a story about how hard it’s going to be to find a job this year for my Your Career column yesterday, but it looks like it will be easier for people who are open to working at smaller firms.
A national report put out late last week found that businesses with 50 employees or fewer are in a hiring frenzy, at least compared to their larger company counterparts.
Are small business owners living in an alternate universe?
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| Amy Sancetta / AP |
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“Not if you consider 51 percent of the GDP, excluding government, an alternate universe,” quips Bill Dunkelberg, chief economist for
the National Federation of Independent Business.
So, even economists can be funny. Who knew?
Dunkelberg’s theory on why small companies are hiring even though the big guys are not, is simple. Larger firms do the bulk of manufacturing in this country, and small businesses typically are more service-sector focused.
Since manufacturing has been hit with a big stick, that’s were job declines are expected.
“People are still going to the local hardware store and getting their nails done,” he says, so small companies need to keep hiring.
When the scary numbers about jobs emerge, he adds, that’s typically focused on the big companies not smaller ones. “I think we’re out in a part of the economy that is major but boring,” he surmised.
OK, here’s how the job growth numbers shake out, according
to the ADP National Employment Report:
Total non-farm private job creation among all business, large and small, rose 40,000 in December. But when you break down the data, small companies generated more jobs than that. Turns out the number of jobs dropped 35,000 among large businesses, but increased 9,000 among medium sized business, and skyrocketed 66,000 among the little guys.
“Throughout the year, small businesses have been the main driver of employment growth, adding a total 716,000 jobs during 2007,” says Joel Prakken, chairman of Macroeconomic Advisers. “In eleven of the past twelve months, small businesses added more jobs than medium- and large-size businesses combined.”
But that doesn’t mean small businesses are walking on easy street. Dunkelberg does admit small firm hiring is weak compared to 2003. Only 11 percent of the NFIB members polled last month said they planned on increasing their hiring, down from 20 percent in 2003.
If you are planning on pumping up your worker ranks, remember to take it slow. Hiring new employees can be one of the best and worst things you ever do.
I have gotten an earful from business owners about the problems they’ve encountered when they first starting hiring workers, outside their family members.
There’s a great nuts and bolts review of hiring for small business owners at the IRS website.
As for finding qualified applicants, that’s one of the nagging headaches for small companies.
Among the 50 percent of small business owners who tried to hire people last month, 80 percent said they were few or no qualified applicants, Dunkelberg says about a recent NFIB report.
The NFIB is working on a report on what exactly is wrong with the applicants out there and will release that in the next few months.
Meanwhile can you all share some of your experiences in the hiring trenches? What are job applicants like out there – lazy, stupid, crazy?
