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Looking for Work? Try Small Employers

Job seekers may find little encouragement in Thursday’s hiring data, but the numbers do suggest a change in strategy, experts say: Think small.

John M. Fugett /

Smaller companies seem to be doing more hiring than big corporations, according to a national employment report by payroll giant Automatic Data Processing Inc. The private sector added 133,000 jobs in May, below estimates of 155,000 in a survey by Dow Jones Newswires. However, employment on small payrolls — those with less than 50 workers — rose 67,000 in May. Cutbacks at big companies may be due to renewed concerns about economic problems in Europe, says Philip Noftsinger, president of CBIZ Payroll, a business services firm based in Roanoke, Va. “But I don’t believe the small-business owner is making material decisions based on macro-economic news.”

In fact, economists say there are tentative signs that small businesses may start hiring more. The firms added around 40,000 new jobs in May, according to a monthly small business employment index from Intuit Inc., a business management firm. And they added nearly 900,000 jobs since October 2009, says Susan Woodward, an economist working with Intuit. The index shows that there is a job recovery in small businesses underway, she says. The index is based on figures from 78,000 small businesses with fewer than 20 employees that use Intuit online payroll.

Temporary and contract employment is also on the rise, which some economists say is another sign of increased in confidence among smaller and medium-sized businesses. Staffing employment in May increased nearly 7% on the year, according to the American Staffing Association, which measures temporary and contract hires. Experts say many smaller business owners are more flexible and likely to take on temporary workers before committing to full-time employment. “These include jobs for accountants and architects,” says Mark J. Perry, professor of economics at the University of Michigan-Flint, “and not just lower-paid temporary employment.”

Other smaller private-sector businesses are already planning to add to their permanent, full-time workforce, according to a new survey this week by research firm Harris Interactive and, a jobs website. Almost one in five businesses with less than 250 employers added full-time employees over the past six months, the research found, while nearly one-quarter of the 2,000 hiring managers and human resource professionals surveyed said they expected to add permanent employees by the end of September. Half of those businesses also plan to take time training new employees who do not have direct experience in their industry.

However, economists say the Bureau of Labor Statistics May unemployment data to be released Friday will give a clearer picture of the health of the wider employment market. (Unlike the latest ADP data, these figures include government workers.) Plus, other data suggests a weakening in the wider employment market, which Noftsinger says could stall plans by smaller employers to add to their payrolls. The Conference Board says the number of online job postings dropped by 45,700 in May. However, that index has risen by 564,000 over the last five months.


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