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SurePayroll, a payroll research firm, released its year-end report on Tuesday. The report is used as a barometer for small-business growth. The report, which surveyed 15,000 small businesses nationwide, showed hiring at small business grew only 0.3% in 2005, compared to 4.4% in 2004.
By the end of December, the size of small businesses (measured by the number of employees) had declined in every region except the Northeast, where hiring has been up 10.4% for 17 straight months. Approximately half of the 21 states monitored reported some type of decline with the most significant decreases in Washington, Pennsylvania, and Texas.
Additionally, the overall salaries at small businesses for the year were also down, by 0.5%, falling to an average of $29,126. The biggest drop came in Florida where the average paycheck shrunk by 10.6% in 2005.
The report indicates that as jobs and average salaries fell, small businesses were increasingly competing with larger companies for good workers. “Larger companies are doing well and are accordingly bidding up salaries in the hunt for talented workers,” stated Michael Alter, president of SurePayroll. So, as the pace of hiring is down, Alter said, small-business owners are facing higher prices for top-tier employees.
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