Cold Weather Has Chilling Effect on Small Business Hiring

A new report shows that the unusually cold winter across the United States may have had an effect on hiring at small businesses, as sales revenue in many parts of the country were down due to weather conditions.

The February 2014 SurePayroll Small Business Scorecard, produced by online small business payroll provider SurePayroll, shows general small busienss optimism slightly up, although the hiring picture stayed fairly frozen, much like consumers over the past few months.

According to survey results, optimism about the small business economy was at 69 percent, which is up four percent from January. Month over month, hiring and the average paycheck were each down 0.1 percent, and one in three small business owners said the severe weather was responsible for a slowdown.

However, the lack of hiring seems to go deeper than that, as three in five said the cost of salary and wages is still the biggest barrier to bringing on new staff.

"The delay in hiring may be more than just an inclement weather delay," said SurePayroll CEO and President Michael Alter. "Yes, it's been a harsh winter, but we've had them before. The underlying problem could be that there isn't enough demand to justify new employees. While we may not be surprised based on our numbers and weak government jobs reports over the last couple months our small business customers continue to hold to their optimistic entrepreneurial spirit."

The Scorecard survey also found that one in three are having trouble finding qualified candidates for jobs. If cost were not an issue and they were to hire, small business owners ranked the need for sales and marketing personnel as their top choices.

"It's an unfortunate Catch-22 when you consider that small businesses can't afford to hire sales and marketing people, yet these are the types of positions that drive revenue," Alter said.

Hiring in the South was up 0.1 percent month over month; down 0.2 percent in the Midwest; 0.4 percent in the Northeast; and flat in the West. The average paycheck was down 0.3 percent in the Northeast and South, and up 0.2 percent in the Midwest and 0.1 percent in the West.

As the first economic indicator created by a payroll company, the SurePayroll Scorecard has provided a monthly look at national hiring and paycheck trends since October 2004. SurePayroll's Scorecard compiles data from small businesses nationwide, and exclusively reflects the trends affecting the nation's "micro businesses" -- those with 1-10 employees. The average business reflected has six employees.