Hiring challenges for small businesses improve as economy remains robust

Hiring challenges for small businesses improve as economy remains robust

The CBIZ Small Business Employment Index reported a seasonally adjusted increase of 0.17% in February, indicating that hiring woes may be easing for small businesses. This comes as the U.S. economy remains strong despite the challenges of high interest rates. Small businesses often struggle with retaining workers due to their inability to offer higher salaries or benefits like health insurance. The CBIZ index tracks hiring among thousands of companies with 300 or fewer employees across the country and shows a positive trend in employment.

Small businesses have shown unexpected strength in expanding their workforce, according to Anna Rathbun, chief investment officer of CBIZ. In February, 20% of companies in the index hired more staff, while 60% maintained their headcounts and 20% cut staff. Certain industries saw gains in hiring, such as administrative and support services, arts, entertainment, and recreation, and technology and life sciences. On the other hand, decreases were observed in industries like accommodation and food services, insurance, and utilities.

Regionally, the West, Southeast, and Central regions saw slight increases in hiring, while the Northeast region experienced a slight decline. This small business trend reflects the broader market in the U.S. where employers added 275,000 jobs in February, surpassing expectations. This job growth represents an improvement from a revised gain of 229,000 jobs in January, highlighting the resilience of the U.S. economy in the face of high interest rates.

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