https://www.wsj.com/economy/jobs/small-business-jobs-hiring-c0b17cf0?mod=hp_lead_pos5
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Available positions at establishments with fewer than 10 workers rose almost 20% in recent months
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America’s tiniest employers have the highest share of job openings on record—more than one in five available positions—a sign the labor market might be tilting toward the little guy.
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Solid demand for workers from small establishments, such as mom-and-pop businesses and many franchise locations, stands in contrast to a cooling labor market more broadly. It could give smaller businesses a chance to catch up on hiring with less competition from larger companies on pay and benefits, and offer refuge for job seekers as the unemployment rate creeps higher.
Establishments with one to nine employees accounted for 21% of all job openings in September, the highest share on records dating back to 2000, according to an analysis of Labor Department data from Julia Pollak, chief economist at the jobs website ZipRecruiter
. Openings at the country’s smallest private establishments rose nearly 20% in September from a year earlier, while falling for larger companies over the same period.
Nancy Bocanegra, who runs a Latin dance instruction business in Queens and Manhattan, is among those small companies looking to hire. To support thriving demand for her salsa, merengue and bachata lessons, she plans to hire three more part-time workers in 2024, adding to the two she already has.
She hopes to bring on additional instructors for her regular classes and a DJ to host dance parties for those who want to learn but are seeking a lower price compared with her group classes, which cost roughly $25 a session.
“What this economy is teaching me is that although my business isn’t accessible to all incomes, I want to create different avenues for different incomes to participate,” she said.
Bocanegra, 35, started Somos Latin Dance in November 2021, after being laid off from her job in career counseling at a college. She said she had long been interested in turning a side hustle of teaching dance into a formal business.
Bocanegra is part of a Covid-era boom in small-business creation that has helped fuel the additional need for hiring at the smallest businesses.
The proliferation of remote employment and other changes to the way Americans work in recent years are allowing more small businesses to form and, in some cases, to source workers from locations across the country, said ZipRecruiter’s Pollak.
The trend in job openings “reflects an increase in demand for workers at these very small companies that can now have superpowers thanks to the technological changes that happened during the pandemic,” she said.
Applications for employer identification numbers—one of the first steps in launching a new business—from the type of entrepreneurs who tend to employ other workers reached nearly 1.5 million in 2023 through October, a 7.5% increase over the same period last year. That is the most since records began in 2005, with the exception of 2021.
Some 61% of small-business owners reported hiring or trying to hire in October, according to a National Federation of Independent Business survey, and 17% planned to create new jobs in the next three months, a level that has remained mostly steady throughout 2023.
“Many of them are still experiencing lost sales opportunities because they’re not staffed as they want to be,” said Holly Wade, executive director of NFIB’s research center.
While hiring demand is holding up at the smallest businesses, overall wage growth is easing. That pullback is a sign of a cool-down in a once red-hot labor market and could benefit smaller businesses that have struggled to compete with larger companies.
Economists expect consumer spending, which has helped boost the economy this year, to slow as the broader labor market eases and Americans spend down savings they accumulated during the pandemic. Forecasters don’t expect the summer’s blockbuster economic growth to continue into the end of 2023 and 2024.
The economy this year has largely defied expectations of a slowdown, however. That dynamic might be motivating small businesses to continue looking for workers, said Luke Pardue, an economist at the payroll platform Gusto. The company’s data show that pay raises and hiring have slowed at small businesses in 2023 compared with 2022, but that the tiniest businesses still have relatively strong demand for workers.
“We’re sort of seeing the economic reality butt up against some of the anecdotes around uncertainty,” Pardue said. “These businesses at some point just need to meet the demand they have.”
Big Time Advertising & Marketing is looking to grow to 10 employees from eight, said Chief Executive Terry MacCauley. He said having additional workers would help his business pursue clients more aggressively. The Chesterfield, Mo., company provides advertising and marketing services to automotive dealerships.
With higher interest rates making car purchases less affordable for consumers, MacCauley believes dealers will be looking for his company’s services to attract potential buyers.
“I do think there’s an opportunity to pick up more clients, and we’re seeing that because the market is tougher,” he said.
MacCauley has been using online job sites to recruit for his open roles for a graphic designer and a salesperson. After three months, a candidate recently accepted the designer job, while the sales role remains open.
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