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The Big Payoff

The trend in SMB hiring is pointing to long-term quality over short-term quantity.

This story appears in the March 2006 issue of Entrepreneur. Subscribe »

Small businesses hired fewer people but paid them more at the end of 2005, reversing a trend in the SurePayroll Hiring Index that lasted more than a year. "We've seen a shift in the data," says Michael Alter, president of Skokie, Illinois-based payroll service SurePayroll. "There have been three down months of hiring, and [for] five of the last six months, salaries have been rising."

In November, the nationwide hiring index reflected a downtrend that began in September and negated most of the gains brought about by the slow expansion of small-business hiring during the first part of the year. Indications were the year would end with a meager 0.3 percent increase in the number of people on small-business payrolls, based on a count of paychecks issued to SurePayroll's 15,000 small-business customers.

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