Low staffing creates a balancing act for small businesses

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Small business

NEW YORK — If you work for a small business, there's a good chance that, since the recession, you have taken on additional responsibilities and are working longer hours. Some of the work that earlier was done by fellow employees might be getting farmed out to freelancers or other independent contractors.

Companies are cautious because they don't know what business will be like in the months ahead. Small businesses are taking some of the same steps as larger companies to avoid hiring new workers.

But for small business owners, finding a way to cope with less staff is a more delicate balancing act because they have fewer workers to pick up the slack when an employee leaves.

The margin of surviving

"Many of them are just at the margin of surviving," said Michael Gibbs, an economics professor at the University of Chicago Booth School of Business. "There's an enormous amount of uncertainty in the economy."

In 2003, Steve Synnott had a staff of about 50, the most people his company, PRO Group, ever employed at one time. Today, the business, which runs the marketing campaign for 600 hardware stores, has 19 full-time employees and three part-timers.

Synnott is finding high-tech ways to hold off on hiring. In the past year, PRO Group invested in what's known as voice over Internet protocol, the research that lets people talk over the Internet in other words than via regular phone lines. Synnott said VOIP has lowered the company's teleconferencing costs, allowing for more frequent teleconferences.

Many small businesses use freelancers instead of their own employees to get their work done. Freelancers, or independent contractors, often cost less than employees because companies don't have to provide benefits or pay Social Security and Medicare taxes for them.