Business Examiner
March 3, 2005

Small businesses appear to have hit the "pause" button on hiring and wage increases, according to the most recent SurePayroll Pay Index. Through February 28, analysts at the national payroll agency have seen zero national growth in small business hiring.

"In effect, the average small business size hasn't changed since the end of 2004," says president Michael Alter. "If there's job growth in the economy, it's coming from large companies, not small businesses."

Small business salaries are also flat, he continues, with the companies showing a nominal decrease of 0.1 percent since February 2004. That trend may suggest that downward pressures on small business salaries, which were prevalent throughout 2004, are finally dissipating a bit. In fact, a 0.1 percent drop through February indicates that salaries will decline by 0.6 percent by the end of the year. That would be good news following the 4.8 percent drop experienced in 2004.

Lack of job growth was attributed to a mass exodus of employees from small businesses driven by a strengthening economy and more hiring at larger companies.

"In talking to our customer base, we see some small business employees transitioning back to larger companies," says Alter. "For these employees, working at a small company was a temporary solution to unemployment that resulted from the dip in the economy."

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