Despite the high interest rates, small businesses are expanding their workforces in February, according to the CBIZ Small Business Employment Index. The index monitors hiring among thousands of businesses with 300 or fewer employees nationwide.
Small businesses often struggle to retain employees due to their inability to offer competitive salaries and benefits like health insurance. However, despite these challenges, the CBIZ index showed that 20% of companies increased their staff, 60% maintained their headcounts, and 20% reduced staff in February.
Anna Rathbun, the Chief Investment Officer of CBIZ, explained that small businesses have shown unexpected strength in the current high-interest rate environment. Certain industries saw more hiring activity than others. Sectors like administrative and support services, arts and entertainment, and technology and life sciences experienced hiring gains. On the other hand, industries like accommodation and food services, insurance, and utilities witnessed decreases in employment.
The positive trend in small business hiring aligns with the overall job growth in the U.S. economy. In February, U.S. employers added 275,000 jobs, surpassing expectations and displaying the economy’s resilience in the face of high-interest rates. This marked an increase from the previous month which saw an addition of 229
