Small Business Is Hiring at Record Rates

Small business is a bit of a misnomer. After all, how can something that comprises 99% of all businesses in America and employs about 50% of the total workers be considered small? Perhaps it’d be more accurate to refer to them as “larger-than-life businesses.”

Indeed, small businesses have an oversized impact on everything from our nation’s exports to the health of the technology industry. And, as one Forbes.com article noted, they play a “vital role in the U.S. economy.”

With this in mind, it’s important to keep tabs on trends within the world of small business. One of the most exciting statistics to come out recently is that a record number of small businesses hired new workers in July. This data is courtesy of the National Federation of Independent Business, which sent out a survey to 1,700 small businesses.

Turns out, small businesses are hiring workers at a record rate. In fact, the hiring spree in July represents a 12-year high. The last time hiring was this high, George W. Bush was president, Google had just purchased YouTube, and Crash won its controversial Oscar.

“Small business owners added the largest number of workers per firm since 2006 in July, adding a net 0.37 workers per firm on average, almost double June’s rate,” the National Federation of Independent Business proclaims in the first paragraph of its report. “Seventeen percent (up 2 points) reported increasing employment an average of 4.7 workers per firm and 11 percent (down 1 point) reported reducing employment an average of 2.0 workers per firm (seasonally adjusted).”

The good news is that this growth in hiring seems fairly sustainable. In the report, 23% of business owners said they had plans to create additional jobs in the coming months. The National Federation of Independent Business notes this is up “3 points from June and at record high levels.”

While this hiring boom is excellent news for job seekers, it presents a unique problem: with low unemployment and lots of job options, workers are becoming more picky. And that puts pressure on small businesses to offer more lucrative pay and benefits.

As the Washington Post puts it, “smaller companies are being hamstrung by the economy’s very strength.” It will be interesting to see how these trends play out, as many small businesses look to expand amidst an increasingly competitive job market.