Report Finds Hiring Freezes and Layoffs Rising Among Small Businesses

Alignable’s September Hiring Report is out and the results show hiring freezes and layoffs among small businesses are increasing rapidly.

According to the study, 63% of small businesses in the U.S. aren’t hiring because they can’t afford to add workers. That’s an increase of 18 percentage points over July’s rate of 45%. Here other highlights:

-49% of those who've stopped hiring were seeking workers to fill jobs earlier in 2022, but ended their recruiting based on high payroll expenses, recessionary fears, and reduced revenues.

-58% of small business employers are paying at least 50% more in labor costs than they did prior to Covid.

-Layoffs are spiking, too. Now, 10% in the U.S. are cutting staff, up six percentage points from 4% in July.

-The top three states with small business hiring freezes are New York (75% aren’t hiring), Ohio (74%), and Pennsylvania (68%). In all three of these states, 7% of small businesses are cutting staffers.

-Small business layoff rates are highest in Florida (12%) and Illinois (11%).

-Sectors most impacted by hiring freezes and layoffs include real estate (69%), auto industry (67%), healthcare (67%), retail (66%), and finance (61%).

-While many restaurateurs spent most of the past year severely understaffed, now 55% of them say they’re not hiring (up by 17%) and 9% are laying off workers.

-Only 23% of small businesses have fully recovered from the impact of Covid - the worst recovery rate in over a year, down 2% from July, and down 20% from Dec. 2021.

The information in the report is based on a poll of 5,618 small business employers taken between Aug. 13 and Sept. 6.