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Small Biz Hiring Up, Midsize Biz Down

One study says small business confidence is sagging. Another says smaller businesses are frantically cutting costs. So why are small businesses hiring?
One study says small business confidence is sagging. Another says smaller businesses are frantically cutting costs. So why are small businesses hiring?With the specter of recession clouding the outlook for businesses and personal finance, risk aversion is understandably on the upswing. In fact, according to a gamut of sources, a bad economy is a good time to consider launching a new business. A hint of statistical validation for this was included in the recent RingCentral survey findings that recent layoffs have sparked an increase in start-ups (22% of participants started a business after getting a pink slip).

But starting a business is one thing -- hiring new staff is another. According to the June ADP National Employment Report and ADP Small Business Report, small businesses gained 7,000 jobs last month. That's a sharp contrast the 35,000 jobs gone from midsize businesses. And though small companies are still brining on new staff, the increase in hiring rate is the weakest since late 2002.

ADPSmallBusinessReportADP

Although it's tough to characterize this sleight growth as robust, some business leaders must be taking a pragmatic approach to the current economic conditions and seeing opportunity. For example, a bMighty reader commenting on waning small business confidence says:

"I'm looking at overall smaller IT budgets for my customers. This is good for my company, as we do more upgrades and repairs to existing equipment, which carry a higher margin than new equipment."

There's also the dismal outlook, pointed out by another bMighty reader who provided a link to a blog post "Future Of Employment In North America" expressing no small degree of pessimism from the labor perspective.

So what's the outlook for small business? For midsize business? Unfortunately, there's no certainty about what the U.S. economy (bear market and all) means for your company's future. But there are opportunities if you choose to see them.

Editor's Choice
Brian T. Horowitz, Contributing Reporter
Samuel Greengard, Contributing Reporter
Nathan Eddy, Freelance Writer
Brandon Taylor, Digital Editorial Program Manager
Jessica Davis, Senior Editor
Cynthia Harvey, Freelance Journalist, InformationWeek
Sara Peters, Editor-in-Chief, InformationWeek / Network Computing