Small Business Hiring Ramps Up

Wages may get a boost

Small businesses and their larger counterparts plan to step up hiring activity in the second quarter, according to CareerBuilder’s latest forecast. Twenty-three percent of companies with 50 or fewer employees expect to add full-time, permanent staff over the next three months, up from 18% last year. Among employers of all sizes, the number planning to hire in the second quarter is up six percentage points over last year.

View the full report here.

The study also shows wages may get an upgrade as companies grow more competitive for skilled talent in the face of shrinking labor pools. Forty-three percent of employers have job vacancies that stay open for 12 weeks or longer. Nearly one in four employers (24%) expect to increase salaries at least 5% in the second quarter compared to the same period last year; among IT employers, the number is 37%.

The national survey was conducted on behalf of CareerBuilder by Harris Poll between Feb. 11 and March 6, 2015, and included a representative sample of more than 2,000 hiring managers and human resource professionals across industries.

“The brisk hiring anticipated for the second quarter comes against the backdrop of stronger sales, new product development, and market expansion among companies of all sizes,” said Matt Ferguson, CEO of CareerBuilder and co-author of The Talent Equation. “Small businesses have been playing a larger part in the solid stretch of job growth the U.S. has experienced over several months. When you pair that with the fact that hiring has increased in a variety of industries and regional areas, it bodes well for workers seeking new and better-paying employment prospects.”

Permanent Hiring in Q1 2015

Hiring in the first three months of 2015 outperformed the same period in 2014. Thirty-five percent of employers hired full-time, permanent employees, up from 29% last year. Those who decreased headcount dropped two percentage points to 9%. Fifty-five percent reported no change in their headcount while 1% were unsure.

Permanent Hiring in Q2 2015

Looking ahead, 32% of employers plan to add full-time, permanent staff in the second quarter, up from 26% last year. Eight percent expect to downsize staff, on par with last year. Fifty-five percent anticipate no change while 5% are undecided.

Industries expected to match or exceed the national average for adding full-time, permanent headcount in the second quarter are:

• Information Technology: 49%
• Transportation: 44%
• Financial Services: 40%
• Health Care (50 or more employees): 32%

Temporary Hiring

Temporary employment is also showing an upswing. Thirty-seven percent of employers plan to hire temporary or contract workers in the second quarter, up from 33% in 2014. Thirty-one percent plan to transition some contract or temporary staff into permanent employees in the second quarter, up from 26% last year.

Hiring By Company Size

While large organizations are adding staff at a faster rate, the increased confidence small and medium-size businesses have displayed in previous quarters is expected to carry over into Q2:

• 50 or fewer employees: 23% plan to add full-time, permanent staff in Q2, up from 18% last year; those reducing headcount decreased from 6% last year to 4%
• 250 or fewer employees: 27% plan to add full-time, permanent staff in Q2, up from 22% last year; those reducing headcount remained at 6%
• 500 or fewer employees: 29% plan to add full-time, permanent staff in Q2, up from 23% last year; those reducing headcount increased from 6% last year to 7%
• More than 500 employees: 38% plan to add full-time, permanent staff in Q2, up from 32% last year; those reducing headcount decreased from 11% last year to 9%

Compensation

Companies may be feeling increased pressure to become more competitive with compensation. While 27% of employers anticipate no change in salary levels in the second quarter compared to the same period last year, 24% expect to boost salaries by at least 5%. Forty-four percent anticipate there will be an increase of 4% or less while 1% expect a decrease and 4% are undecided.