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Some Small Businesses Are Pulling Back on Hiring. Here’s What’s Giving Them Pause

Sixty-three percent of U.S. small-business owners are halting hiring, according to a survey of 5,618 small businesses by small-business network Alignable Inc. Of those, about 49% said they were looking for workers earlier in the year but stopped because of high payroll expenses, recession fears, and reduced revenue. In July, only 45% said they were pausing hiring. About 58% of small businesses said their total payroll costs are at least 50% more than prior to the Covid-19 pandemic. About 10% of small-business owners said they are cutting staff, up from 4% in July.

The percentage of small- and midsize-business owners feeling pessimistic inched up to 7% in the summer compared with 2% in the spring, according to a survey by PNC Bank. But 49% of owners still described themselves as highly optimistic. Nearly seven in 10 owners (69%) said they fear a recession is likely within the next year. Recruiters said the hiring market for top talent will remain intense, according to a survey by Employ Inc. About 69% said attracting and hiring talent will be difficult for the remainder of 2022, while more than half said there is not enough quality talent to fill current jobs.