They also say they’re turning to A.I. for help.
Small businesses might be feeling financial pressures, but they haven’t halted their hiring plans altogether.
Fifty-one percent of small businesses are still hiring, according to a survey of 550 U.S. small businesses released today from American Express. Seventy percent of those small businesses say that “financial growth, the creation of new roles, and a general need” are driving that move.
This news stands in opposition to overall jobs numbers: In March, job openings reached their lowest point in almost two years, though this still remains well above pre-pandemic levels.
Naturally, there’s a divide by business size. According to the survey, larger small businesses are far more likely to be hiring than the smaller ones by a difference of 69 percentage points. “You are really seeing those smaller small businesses trying to [hire] very judiciously in this environment,” says Brett Sussman, vice president of Business Blueprint and Banking at American Express, who oversaw the survey.
This split between smaller and larger small businesses manifests in overall financial confidence, according to the survey. Fifty-four percent of small-business owners say they feel very confident when making growth decisions for their business, but among the smallest of those companies, just 29 percent feel confident in their ability.
Volatile costs could be contributing to timidity, overall, as about four in 10 small businesses report turning down potential growth opportunities because of cash flow concerns. The latest gross domestic product report reflects this inclination to scale back as well, with weaker business investment numbers in the first quarter. Experts say businesses could be hunkering down for a potential recession in the year’s second half.
It’s clear that small businesses are feeling financial pressures, but some are leaning on new technology to guide their next steps: Forty-one percent say they are prioritizing A.I. to help make business decisions, according to the survey.
These businesses are also using A.I. to save time (39 percent), increase customer service efficiency (20 percent), and improve data security (21 percent). Younger owners are particularly eager to use A.I. to run their small businesses, regardless of their size, according to the survey.
“I’m hopeful that some of these tools, over time, will free up small-business owners both in their confidence and their time to make the most impact in growing their business,” Sussman says.