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Small Businesses Are Doing More Firing Than Hiring

Gallup says the hiring outlook is bleak and will stay that way for the next 12 months.

Think small businesses are key drivers of job growth? Think again: The latest Wells Fargo - Gallup Small Business Index shows they're anything but. 

In surveying 603 small business owners, Gallup found that net hiring for the past 12 months has slumped to negative 12 on its index. The index is computed by subtracting the number of number of companies cutting jobs from those adding positions. 

With only 11 percent of small business owners reporting an increase in jobs, and 23 percent reporting a decrease in jobs, the hiring landscape looks a lot like it did back in January 2011.

On the one hand, this is up from the negative 27 hiring index low of January 2010. But on the other hand, the outlook for the next twelve months is expected to remain just as bleak, said Gallup. 

Net hiring intention remains positive at six percentage points, but trailed behind last year's expectation by four points. This is due to an increase in owners who expect the number of jobs at their companies to decrease--from nine percent in April 2012 to 14 percent in April 2013.

The number of owners who expect to grow staff only increased by one point this year, reaching 20 percent. 

According to Gallup, this makes sense when considering how the Affordable Care Act might impact small businesses' bottom line. As the previous survey noted, four in 10 small business owners held back on hiring, while 20 percent went so far as to let some employees go. 

Last updated: May 29, 2013


Jana Kasperkevic is a graduate of Baruch College, City University of New York, where she earned a bachelors degree in Journalism and Political Science. She covers start-ups, small businesses, and entrepreneurship for Inc. Her work has appeared in The Village Voice, InvestmentNews, Business Insider, and Houston Chronicle, among others. She lives in Brooklyn.

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