Small businesses are increasingly unwilling to hire because they can’t afford to take on new costs, according to a newly released survey.
The small business network company Alignable released the survey Wednesday.
It found that 63 percent reported putting hiring on hold “because they can’t afford to add staff, and 10% of that group is laying off workers.”
“This decline is quite significant, as it’s 18 percentage points higher than it was in July (at just 45%),” the report added.
“Beyond that, the percentage reducing their staff jumped 6% to 10% this month from just 4% in July.”
The poll queried 5,618 small business employers from Aug. 13 of this year through Sept. 6.
The poll found a significant portion of small businesses have still not recovered from the pandemic-era shutdowns.
“Beyond the skyrocketing price of labor, only 23% of small business owners say they have fully recovered financially from the worst years of COVID, down 2% from July and down 20% from December 2021,” the report said.
“This 23% recovery rate is the lowest the Alignable Research Center has seen in more than a year.
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“Looking only at August revenue, 51% of all small businesses generated half or less of their pre-COVID monthly earnings, up 13% from 38% in July.”
But the pandemic is not the only reason for the freeze.
“Nearly half (49%) of those in a hiring freeze now said they were hiring earlier this year, but shifted gears due to economic factors, including general inflation, labor costs, and fears of a recession,” the report said.
This survey comes on the heels of a July Alignable report that found small businesses were considering shutting down in droves.
The report found that 47 percent of small business owners “say their businesses are at risk of closing by fall 2022, unless economic conditions improve significantly.”
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