Small Business Owners plan to add 3.8 million jobs this year, according to the latest Small Business Success Index released Monday.
When asked about their hiring plans for 2011, 28 percent of small business owners surveyed said they expect to increase staffing by an average of two full-time employees, said the index, released by the Center for Excellence in Service at the University of Maryland. Sixty-nine percent said they expect no changes in staffing level and 2 percent expect to lay off workers.
Though less than one-third of small business owners plan to hire, the jobs they add could reduce the U.S. unemployment rate by 2.4 percent, according to a press release issued by the university to announce the latest semiannual study.
“Small businesses are the economic engine of the United States,” said Janet Wagner, director of the Center for Excellence in Service.
Small business owners overall optimism stands at “C-“ and is unchanged from the last index published in June 2010. Business owners report difficulty obtaining credit, and challenges in marketing and innovation. The survey also finds that business owners are increasing their use of social media. Thirty-one percent currently use social media, up from 24 percent a year ago and 12 percent two years ago.
Small business owners, defined as having fewer than 50 workers, have added 100,000 jobs in each of the last three months, reports ADP in its February 2011 employment report. Most of the jobs, 97 percent, were in the service sector, and 3 percent were in manufacturing.
“Employment gains in the small-business sector have been positive for 12 consecutive months, an encouraging sign for the job market,” said ADP in a release announcing its February job statistics.
Employment by medium-sized businesses, defined as those with between 50 and 499 workers, increased by 104,000 in February ADP said, while total nonfarm private employment was up by 217,000 jobs.
Small businesses are attuned to their customers and can quickly adjust to changing market conditions, says the website SmallBusinessNotes.com: “A number of entrepreneurs, in fact, see a downturn as a time of opportunity. Not only do they have excellent employee choices, but as other areas of the economy tighten, many larger businesses are outsourcing services that small business can step in to supply. Entrepreneurs, after all, are noted for finding opportunity in the most unlikely places – why not a recession?”