The New Job Creators: Microbusinesses

Jacqui Kenyon
Posted

microbusinessMany job seekers aspire to work for household-name companies whose products they trust and use every day—companies like FedEx, Hewlett-Packard and Staples.

However, it’s those same big companies that cut thousands of jobs during the recession and remain slow to hire today.

So what’s someone on the job hunt to do?

Recent research from the California Association for Micro Enterprise Opportunity shows that one sector of employers dominates the job-creation landscape: Companies with fewer than five employees, also known as “microbusinesses.”

Job Creation by the Numbers

Between 2004 and 2010, microbusinesses created 5.5 million jobs, as opposed to the 1.8 million jobs lost by large companies with 500 employees or more during that same period. Then, at the height of the financial crunch in 2009 and 2010, microbusinesses were the only employers who added jobs, MSN reports, while other business categories slashed their payrolls.

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A second look at the numbers demystifies some of the job-growth magic of microbusinesses: For the past 20 years, overall job creation has been negative, with the exception of new businesses that are less than a year old (which often qualify as microbusinesses at the beginning)—and new companies tend to only add jobs, not cut them, so their job creation is 100%.

Still, this news could spell opportunity for job seekers who might do well to think small in their searches, taking advantage of the more robust hiring practices of smaller, newer businesses.