ANTenna Blog -- Business & E-Business

Despite the recent news of unemployment rising, small-business hiring actually increased -- though by less than 1 percent -- in February. At least it's a departure from all the doom and gloom of late.

Just a couple of days after I posted that small and midsize businesses lost 576,000 workers during the month of February, now I'm hearing that small businesses reported a 0.3 percent increase in hiring last month over January. The data comes from the SurePayroll Hiring Index.

Any good news should be met with enthusiasm, but there's a disclaimer: SurePayroll didn't account for any companies that went out of business: "If a business doesn't process a payroll, they don't show up in our economic data." So the small companies that made it through the past couple of months showed up in the data, but the ones that failed didn't figure into the statistics.

And another caveat is that although small businesses reported hirings, the trend is to bring on contractors rather than full-time employees.

"It makes sense that small businesses are hiring contractors over employees because the future is uncertain, and it's easier to terminate a contractor than to terminate an employee," stated Michael Alter, president of SurePayroll. "Contractors also cost small businesses less because they don't receive benefits, and employers are not required to withhold employer payroll taxes for contractors."

Other SurePayroll findings include:

• Small-business salaries dropped -- again -- in February. SurePayroll's Pay Index was at 1,027 at the end of January and ended February at 1,019, a 0.8 percent decline, which is the largest monthly drop since December 2004. The average small-business paycheck in the United States is now $31,317.
• Only 48 percent of surveyed small-business owners are optimistic about the small-business economy, and some of the gains in optimism that came after the election and during the holiday have dissipated.
• The Midwest, Northeast, and South experienced hiring growth in February. The West was the only region that experienced a hiring contraction in February.

SurePayroll says its hiring index is based on actual payroll data for 25,000 businesses with 100 or fewer workers across the United States. To prepare its economic indices, SurePayroll aggregated this payroll data and calculated a 12-month trailing average on small-business head count.

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