Only half of the 3,000 discharged executives and managers studied took up posts at small companies, a significant decline from the 67% making such a move in the pre-bubble 1999 job market. Overall, the number of job seekers hired by companies with 500 or fewer employees has fallen 25% since 1999, according to data supplied by outplacement firm Challenger, Gray & Christmas, Inc.
“What is so surprising is that we are more than two years into the recovery and small business hiring has continued to decline, “John Challenger, chief executive officer of the outplacement firm, said in a news release. “This is a major reversal from the last recovery when small firms began adding workers almost immediately. Nearly 70% of unemployed executives and managers went to small companies between 1991 and 1994.”
Challenger though finds reason to be optimistic in the fourth quarter of 2003’s numbers, which he believes “may represent the bottom of the trough.” Citing statistics from the National Federation of Independent Business, Challenger says the net percentage of small firms planning to boost employment rose to 20% in December. Additionally, the percentage of firms that said they have at least one hard-to-fill job reached 20% last month.