Hiring challenges for small businesses improving with continued economic strength

Small Business Hiring Surges Amid Strong U.S. Economy

Small businesses are experiencing growth in their hiring conditions, according to recent data from the CBIZ Small Business Employment Index. In February, there was a seasonally adjusted increase of 0.17%, indicating that small businesses are slowly adding to their workforce as the U.S. economy continues to perform well despite high interest rates.

One of the main challenges faced by small businesses is retaining employees due to their inability to offer competitive salaries and benefits such as health insurance. The CBIZ index monitors hiring trends among thousands of companies with 300 or fewer employees across the country.

Anna Rathbun, the chief investment officer of CBIZ, attributes this unexpected strength of the U.S. economy to the steady expansion of small business workforces in February. Approximately 20% of companies in the index hired more employees, while 60% maintained their current headcounts and 20% reduced staff.

Industries like administrative and support services, arts and entertainment, and technology and life sciences experienced gains in hiring, while industries such as accommodation and food services, insurance, and utilities saw decreases in hiring. Regionally, the West, Southeast, and Central regions saw slight increases in hiring, while the Northeast region experienced a slight decline.

This trend in small business hiring aligns with the broader market as U.S employers added 275,000 jobs in February, surpassing expectations and demonstrating the resilience of the U.S economy in the face of high interest rates

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