Survey Says Small Businesses Are Finally Hiring, But Cautiously

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Smaill Business Hiring Small business managers want to hire more people -- they really do. And they intend to hire more people in 2011. But they also report they will likely be hindered by continued challenges related to accessing credit, government regulations and health insurance costs. This is according to a new nationwide survey from CareerBuilder, conducted between Nov. 15 and Dec. 2, 2010, among more than 1,350 small businesses (organizations with 500 employees or fewer).

Half of small businesses (51 percent) reported that they are in a better financial position than one year ago, but overall they remain cautious in recruitment plans. Job growth for this segment is expected to be better in 2011, but it will continue at a modest pace.

Will they add full- or part-time employees?

When it comes to full-time positions, 21 percent of small businesses plan to add full-time, permanent employees in 2011, up slightly from 20 percent last year and up from 15 percent in 2009. Similar to last year, 6 percent of small businesses expect to decrease full-time, permanent staff, which is half of the number reported in 2009.

There's an increase in those who expect to hire part-time help as well. Eleven percent of small businesses are hiring part-time help, up from 9 percent last year and up from 8 percent in 2009. The number of small businesses planning to decrease part-time hires (3 percent) is trending below the 5 percent figure reported in 2010.

Accessing credit and other major challenges

Of course, a lot of those hiring plans are contingent on credit, health insurance obligations, and several other factors. Eighteen percent of small businesses reported they were unable to access the credit needed to support their businesses in 2010. More than one-quarter (26 percent) of those companies who could not obtain credit were unable to add employees. Of those companies who were able to access credit last year, 66 percent were able to hire new employees.

Looking forward, 33 percent of small businesses do not think, or are unsure whethe their companies will be able to access credit needed in 2011; 16 percent said credit concerns would prevent them from adding staff members this year.

In addition to credit issues, small business employees cited the following as their top challenges for 2011:

  • Cost of health insurance – 50 percent
  • Government regulations – 27 percent
  • Marketing expenses and building awareness – 26 percent
  • Attracting and hiring top talent – 19 percent

"Small businesses are a major driving force behind job creation in the U.S. and play a vital role in economic growth," said Matt Ferguson, CEO of CareerBuilder. "Small businesses had been in a holding pattern where they were less likely to decrease headcount compared to larger organizations, but also less likely to add new staff. Over the last year, we saw modest, but continued gains in jobs that are carrying over into 2011. Before we see people back to work in greater numbers, we need to find ways to get this segment of the economy hiring again."

Next: Top 10 Companies Hiring This Week

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