Report finds hiring freezes and layoffs are increasing at small businesses

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

According to the study, 63% of small businesses in the United States are not hiring because they cannot afford to hire. That’s an increase of 18 percentage points from July’s rate of 45%. Here are some other highlights:

-49% of those who stopped hiring were looking for workers to fill jobs earlier in 2022, but stopped hiring due to high payroll charges, recession fears and reduced incomes.

-58% of small business employers are paying at least 50% more in labor costs than before Covid.

-Layoffs are also increasing. Today, 10% in the United States are reducing their workforce, up six percentage points from 4% in July.

-The top three states where small businesses are freezing hiring are New York (75% not hiring), Ohio (74%) and Pennsylvania (68%). In these three states, 7% of small businesses are reducing their workforce.

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

-Sectors most affected by hiring freezes and layoffs are real estate (69%), automotive (67%), healthcare (67%), retail (66%) and finance (61%).

-While many restaurateurs have spent most of the past year severely understaffed, now 55% say they are not hiring (up 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 20% from December 2021.

The information in the report is based on a survey of 5,618 small business employers between August 13 and September 6.

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