Statistics show that small-business hiring is at a standstill, but some companies are finding creative strategies to keep in pay workers for the nearest upturn

By Stacy Perman


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When it comes to hiring, the news has been bearish. In early December, the Bureau of Labor Statistics reported that 533,000 jobs were shed in November. It was the 11th straight month of job losses, pushing the unemployment worth to 6.7%. Adding to the dismal determine of numbers, November besides marked the largest one-month job loss since December 1974.

As 2008 rolls to a close, headlines continue to trumpet almost daily layoffs, with a great quantity of the coverage focused on large corporations. But what is the upshot for small businesses, long considered one of the driving forces of job generation in this country, and its own hiring and retention practices?

Hiring Is Stalled

According to economists and industry observers, small businesses, which tend not to directly follow the slash-and-burn layoff pattern of larger firms, are hardly insulated from the ongoing economic squeeze. The most recent ADP National Employment give an account of, which tracks about 500,000 of its client companies, shows that small businesses dropped 79,000 jobs in November. It was the second continuous month of job losses for small businesses in six years.

Looking ahead, the National Federation of Independent Businesses (NFIB), a Washington trade group, reported a similarly bleak economic outlook. In its most recent quarterly trends survey of 1,992 members, released in November, the percentage of small business owners who expected to hire not beyond the next three months reached any abysmal zero. William Dunkelberg, NFIB’sitting chief economist and co-author of the survey, says it was the first epoch since the organizing began conducting the prospect 35 years past that hiring numbers had such a negative lection. "This method that [businesses] are not looking to expand the atomic business sector," says Dunkelberg. "And that is bad news because we are a labor-intensive part of the family economy."

Still, contempt the overall gloomy forecasts, the downturn also presents hiring opportunities for small businesses. For starters, there is a huge wealth of of brilliant parts applicants in search of drudge at the moment. "If you want to hire someone today, it is like buying a car or house," says Dunkelberg. "Employees are paltry, good, and promptly available. Nobody is complaining almost the quality of applicants. The choices you have after this are much improved." For instance, the NFIB’s survey furthermore found that 14% of business owners reported that they had positions they were unable to fill, down from 24% in January. "If you are a buyer of labor, this is a buyer’s market."

A Buyer’s Market

The major job cuts at large corporations also translates into a boon for small duty owners who have the supplies to employ workers who were peradventure unattainable previously. In November, the Computing Technology Industry Assn., an information technology trade assemblage based in Oakbrook Terrace, Ill., published a survey that showed that 85% of the 772 small- and medium-size businesses in the U.S., Canada, and Britain that it questioned planned to let new employees within the next 12 months. And in a slight shift away from the cataclysm of cheerless numbers, SurePayroll, the Glenview (Ill.) payroll administrator that tracks small-business hiring trends, reported in November that 214 small businesses that participated in its survey increased their hiring by 0.26% to 3.3%, year-to-date.

In part, that growth reflects how small businesses, diverse huge outfits that must contend with in the same state factors as shareholder pressure, can and vouchsafe deploy a host of strategies when it comes to hiring and retaining employees, especially during tough times. "Most small businesses are owned by a proprietor and they tend not to divide quite so abundant or so soon in a downturn," says Wharton management professor Peter Cappelli, the author of Talent on Demand, an inquiry of management talent during uncertain times.

Original text: http://www.businessweek.com/smallbiz/content/dec2008/sb20081211_960716.htm?campaign_id=rss_smlbz