Small Businesses in the US Tide Over Hiring Challenges with Seasonal Increase in February, While Still Struggling with Workforce Retention

Challenges in small business hiring are starting to improve due to a stable economy

Small businesses in the US are experiencing a slight easing of their hiring woes, according to the CBIZ Small Business Employment Index. Despite high interest rates, there was a seasonally adjusted increase of 0.17% in February, indicating that small businesses are expanding their workforces. However, they often struggle to retain workers due to their inability to offer higher salaries or benefits like health insurance.

The CBIZ index tracks hiring trends among thousands of companies with 300 or fewer employees nationwide. In February, 20% of companies in the index hired more staff, while 60% made no changes to their headcounts and 20% cut staff. Some industries saw hiring gains, such as administrative and support services, arts, entertainment, recreation and technology and life sciences. On the other hand, industries like accommodation and food services, insurance and utilities experienced decreases in hiring.

Regionally, the West, Southeast and Central regions saw slight increases in hiring while the Northeast region saw a slight decline. This trend aligns with the broader market trend where U.S employers added 275,000 jobs in February which surpassed expectations and demonstrated the resilience of the US economy despite high interest rates. This job growth was higher than the previous month’s revised gain of 229,000 jobs

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