Considerably more than any other factor, an increase in demand for products and services will determine small business hiring, according to the May 2014 SurePayroll Small Business Scorecard survey.
The Glenview-based small business online payroll provider said 67 percent of small business owners say that if they see an increase in demand, it would spur them to hire. That is a significant leap from one year ago, when only 30 percent said an increase in demand would cause them to hire.
Contact information ( * required )
"If the demand is there, small businesses will hire," said SurePayroll Vice President of Marketing Scott Brandt. "Put differently, hiring should track sales and revenue more than other factors, such as needing to fill specific roles or workload."
Only one in three small business owners surveyed said having too much to do or needing specific expertise to accommodate clients' needs would cause them to hire. The need for administrative help has dropped dramatically, as almost no one said it would cause them to hire in 2014, compared to 28 percent in 2013.
In May, nationwide hiring dropped 0.1 percent and the average paycheck was down 0.2 percent. The percentage of independent contractors ticked up .02 percent to 6.54 percent.
Optimism, however, hit a one-year high, at 75 percent.
"The weather is finally improving, the economy seems relatively stable, so you're seeing optimism back up around its high," Brandt said. "It's the growth piece that may be missing before we see a breakout in demand and then hiring. It's just not clear when we'll get there."
Hiring in the South was up 0.1 percent in May; down 0.2 percent in the Midwest; up 0.4 percent in the Northeast; and up 0.1 percent in the West. The South also saw the only increase in the average paycheck at 0.1 percent, while it was down 0.2 percent in the Midwest; down 0.4 percent in the Northeast; and down 0.4 percent in the West.
As the first economic indicator created by a payroll company, the SurePayroll Scorecard has provided a monthly look at national hiring and paycheck trends since October 2004. SurePayroll's Scorecard compiles data from small businesses nationwide, and exclusively reflects the trends affecting the nation's "micro businesses" -- those with 1-10 employees. The average business reflected has six employees.
The full SurePayroll Small Business Scorecard -- Main Street Matters infographic includes data for SurePayroll's top MSAs. The May 2014 Scorecard is available now on the SurePayroll blog.