More small business owners are firing employees rather than hiring

A small business owner, right, speaks with Intuit employees at an Intuit event in Mountain View, Calif. Intuit, which makes financial software, was offering advice on hiring new employees.
(George Nikitin / Invision for Intuit)

In the last year, more U.S. small businesses were giving employees the boot rather than hiring, a recent survey found.

The Wells Fargo/Gallup Small Business Index survey reported a net hiring index of -12 in April, down from -9 for the same period the previous year and down from -10 in January. The quarterly analysis surveyed 603 small business owners.

Net hiring has remained at similar levels since January 2011, but is up from the low of -27 reported in January 2010, Dennis Jacobe, Gallup chief economist, said in a statement. The figure is calculated by subtracting the percentage of owners expecting a decrease in jobs from those expecting an increase.

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Hiring intentions were at +6 in April, and the percentage of owners who expect to add new jobs is slightly higher than those who plan to eliminate them in the next year. The figure is a little higher than January’s +5, but slightly below the +10 of April 2012.


“Small-business owners’ self-reported net hiring over the past 12 months remains anemic,” Jacobe said. “While owners’ net hiring intentions for the next 12 months remain slightly positive, they trail where they were at this time last year.”

While there seems to be a lot of optimism on both Wall Street and Main Street, the confidence hasn’t translated into significant job growth at small businesses, Jacobe said.

“Because small businesses are the key driver of job growth in the U.S. economy, it is hard to see how the recent surge in economic optimism -- at least on Main Street -- can continue to increase without increased small-business job growth,” Jacobe said.


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