Small Businesses in U.S Slow the Rate of Hiring

Posted on April 20, 2012 by

According to a survey conducted by Manta, it was seen that, though small businesses are hiring, the rate at which they are adding employees to their companies is very slow. This has led to the decrease in hiring rate.

47 percent said they hired new employees in 2010 and 33 percent plan to hire this year. Of those SMBs who already have hired new employees, only 6 percent hired more than 10 employees.

According to HIRE Act, which came in to existence in March, the law provides exemption for small businesses from paying Social Security Payroll Tax of 6.2 percent, if they hire people who are unemployed for 60 days or more, until December 2010. It also offers employers a credit of $1,000 if new hired employees stay with the company for a year.

The companies participated in the survey said that, hiring is done for jobs in sales/marketing (20%) and operations (9%).

Of the SMBs who do not plan to hire new employees in 2010, cited reasons such as, lack of cash flow (31%), unable to anticipate financial conditions that are improving enough to justify hiring (26%), and no need of new employees (25%).

Other 31 percent of survey respondents said they eliminated jobs in the last 3 years, while 62 percent said they had not. On being asked about the salaries for new hired employees, 48 percent said they will maintain the same salary as of pre-recession levels and 46 percent said they will decrease it below pre-recession totals.

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