The latest survey and monthly hiring index released by online payment company SurePayroll shows small business owners are optimistic about future economic prospects and continue to hire workers for their businesses. Nationally, small business hiring was up 0.7 percent in the second quarter, a slowdown from the first quarter 2009 when we saw a hiring increase of 0.8 percent.
Still, SurePayroll president Michael Alter said it's respectable growth in light of the tough economy. Year to date, small business hiring, as measured by changes in the average size of a U.S. small business, is up 1.5 percent. Salaries, on the other hand, have consistently been trending in the opposite direction. Year to date, the average small business salary has dropped 4.3 percent.
Alter said the bad news for the unemployed is that salary declines appear to be accelerating. Salaries declined 2.5 percent in the second quarter, whereas they declined only 1.8 percent in the first quarter. "While salary declines reduce consumer purchasing power, lower salaries do make it easier for business owners to hire new employees," Alter said.
For June 2009, Alter said SurePayroll saw an increase in small business owner optimism levels. In response to a survey we conducted at the end of June, 79 percent of responding small business owners indicated that they were optimistic about the small business economy. That represents an uptick in optimism from May 2009 when 73 percent of respondents indicated they were optimistic about the small business economy. In April 2009, only 66 percent of respondents were optimistic.
The SurePayroll Hiring Index rose 17 points to 11,447 in June, up from 11,430 at the end of May, representing a 0.2 percent month-over-month increase in hiring. Alter said it's the smallest monthly increase in hiring that they've seen this year. As of the end of the second quarter, the Hiring Index is up 1.5 percent for the year. "Despite the difficult economy, many small businesses are still hiring," he said. The SurePayroll Hiring Index is calculated from the actual payroll payments made by tens of thousands of small businesses that use SurePayroll's payroll service. The Hiring Index tracks the total workforce for a small business, including employees and contractors.
The company tracks small business salaries with the SurePayroll Pay Index, an economic index of the average salary paid by a U.S. small business. The index now stands at 984, down from the May reading of 992, representing a one-month drop of 0.8 percent. "That's the second small monthly decline we've seen this year and the lowest in the past five months, suggesting that salary drops may have finally started to decelerate in June," Alter said.
Year to date, salaries are down 4.3 percent. The average small business annual paycheck in the United States is now $30,243. In June 2008, it was $32,386. Year over year, that equates to a 6.6 percent drop in salaries. "It's tough to find a job these days," Alter said. "It's even tougher to find a job that pays you what you used to earn in the past."