Challenges in small business hiring are starting to improve.

Small businesses in the U.S. are experiencing some relief from hiring challenges, with the CBIZ Small Business Employment Index reporting a seasonally adjusted increase of 0.17% in February. Despite facing difficulties in retaining workers due to constraints like low salaries and limited benefits such as health insurance, small businesses are expanding their workforces. The index monitors hiring activities among thousands of companies with 300 or fewer employees nationwide.

According to Anna Rathbun, the chief investment officer of CBIZ, the strength of the U.S. economy in the current high-interest-rate environment has led small businesses to steadily increase their hiring during February. Around 20% of companies in the index hired more employees, while 60% maintained their headcounts and 20% reduced staff. Some industries saw growth in hiring, such as administrative and support services, arts, entertainment, recreation, and technology and life sciences, while others like accommodation and food services, insurance, and utilities experienced declines.

Regionally, the West, Southeast, and Central regions witnessed slight increases in hiring, while the Northeast region saw a slight decline. This hiring trend among small businesses is reflective of the broader market, where U.S. employers added 275,000 jobs in February, surpassing expectations and demonstrating the resilience of the U.S. economy in the face of high interest rates. This job growth in February was higher than the revised gain of 229,000 jobs in January.

Small businesses across the country are finding it easier to hire workers due to a strengthening economy that is leading to increased demand for labor.

Anna Rathbun explained how this is particularly true for smaller firms that may not have had access to credit during previous economic downturns.

“With interest rates on an upward trajectory,” she said

By Riley Johnson

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