Small businesses boosted hiring in January

In recent months, many small business owners might have seen some of the difficulties being experienced in the broader economy and wondered what that meant for them. However, it seems to have provided little deterrent to entrepreneurs who are looking to hire new employees, as the on-boarding of these workers actually ticked up a little bit in the first month of the new year.

Indeed, there was a 0.28 percent increase in hiring to start off 2016 on the right foot for many companies, as the Small Business Jobs Index ticked up to a reading of 100.65, according to the latest data from Paychex and IHS. That overall number was the largest increase observed since May, as well as the largest one-month increase in about two years. It further helped to offset some of the declines observed in recent months.

"With the one-month gain, small businesses continue to hire, and at a faster pace, to begin 2016," said Martin Mucci, the president and CEO of Paychex. "Hopefully, this will be the start of a positive employment trend for the new year."

With hiring up, small business owners think they're in better shape going forward.With hiring up, small business owners think they're in better shape going forward.

What does all this mean?
Largely as a result of this sizable step forward, though, the overall national employment index increased 0.31 percent over the entire previous three months (November 2015 through the end of January), the report said. As with the improvements seen month-over-month, this marked the single best growth rate over any three-month period since the one ending March 2014. In addition, despite the negative trend in hiring throughout 2015, the one seen in January was so strong that there was no annual decline.

Which industries were hiring most?
Of course, these improvements are not felt universally, the report said. Some states perform better than others, and that's also true of many different cities across the country. And when it comes to the various industries in which small businesses operate, it seems that construction is one area where hiring has been particularly strong, with an increase of 0.44 percent in the month of January alone, the largest one-month gain it has experienced in three years. Leisure and hospitality were also in good shape as well, rising to levels not observed in about 18 months. Meanwhile, only one industry – professional and business services – saw hiring take a slight step back, indicating just how strong the month was overall.

The more that businesses can do to make sure they are on solid footing before they make any hiring decisions, the better off they are likely to be going forward. One way in which entrepreneurs might be able to ensure these types of decisions are going to be beneficial in the long-term is by coming up with a comprehensive financial plan to help provide more certainty going forward. Working with a community bank to develop this plan may likewise help to inform future decision-making efforts.

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