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Many small businesses across the country increased hiring by 0.3 percent from January to February and by 0.6 percent year to date, but they are outsourcing the work to contractors used on an as-needed basis, according to a scorecard released Friday.

The SurePayroll Hiring Index, which defines small businesses as those with fewer than 100 employees, also showed that companies in the Northeast increased their number of employees by 1.5 percent, but paycheck amounts dropped by 0.9 percent through the end of February.

"Basically, you paid less so you could hire a little more," said Michael Alter, president of SurePayroll, an Illinois online payroll service that has 25,000 clients nationwide and compiles the economic index.

Contract workers could be consultants, temporary or per-diem workers, or another small firm brought in under an agreement to complete a project.

The owner of the hiring company typically does not offer benefits or withhold taxes for contract hires.

"The number of contractors is growing at a faster rate. That sort of makes sense when you think about the uncertainty that's out there," Alter said.

The SurePayroll Hiring Index uses a 12-month trailing average that follows the calendar year.

The average small-business paycheck in the United States totals $31,317 a year, according to the company's data, which Alter said does not distinguish owners from employees.

As of February, Alter said, the index showed that only 48 percent of small-business clients surveyed feel optimistic about the economy, the first time the reading has fallen below 50 percent since September.

SurePayroll launched the hiring index in 2004 and the numbers have tracked up and down over time, Alter said.

Looking ahead, the company expects drops in both hiring and wages in the coming months, he said.

"The other big challenge now is figuring out how to get capital to small businesses to grow or start new ones," he said.