Small Businesses Kick-off Q2 with an Uptick in Hiring
The CBIZ Small Business Employment Index ("SBEI") reported a seasonally adjusted increase of 0.29% in April, marking the third consecutive month of hiring gains for small businesses. The CBIZ SBEI tracks payroll and hiring trends for over 3,000 companies that have 300 or fewer employees, providing broad insight into small business trends.
"The American economy continues to move forward steadily, showing resilience and defying expectations of a slowdown," said Anna Rathbun, CFA, Chief Investment Officer, CBIZ Investment Advisory Services, LLC. "On the other hand, the skilled labor shortage, which became visceral during the pandemic has lingered, and employers continue to prioritize talent in this tight labor market."
The Bureau of Labor Statistics' employment report indicated hiring growth that despite growth, missed expectations. The April reading showed an overall increase of 175,000 private-sector jobs. The national unemployment rate rose slightly to 3.9%. The report is inclusive of all non-farm private employers across businesses of all sizes. Meanwhile, the ADP employment report indicated hiring growth among small, medium and large-sized companies. Its April reading showed an overall increase of 192,000 private-sector jobs for the month. Small businesses accounted for an increase of 38,000 of those jobs on a seasonally adjusted, month-over-month basis. The ADP report counts small businesses as companies with 49 or fewer employees, while the CBIZ SBEI uses data from companies with 300 employees or fewer.
Regionally, the Northeast (0.63%), Central (0.53%), and Southeast (0.13%) all experienced a hiring increase. The West (-1.21%) was the only region to experience a decline.
On an industry level, gains in employment were seen in Administrative and Support Services; Agriculture, Fishing and Hunting; and Arts, Entertainment and Recreation. Hiring decreases were seen in Educational Services, Financial Services, and Utilities.
Rathbun added, "Despite a slight uptick in the unemployment rate and nonfarm payrolls falling short of expectations, the addition of 175,000 jobs this month aligns more closely with consistent indicators like the ADP numbers, suggesting the labor market remains robust."
To view an infographic with data from the employment index, visit the CBIZ website.
Additional takeaways from the April SBEI include:
April's snapshot: 19% of companies in the index increased staffing, 61% made no change to their headcounts and 20% reduced employment totals.
Industries at-a-glance: Administrative and Support Services; Agriculture, Fishing and Hunting; and Arts, Entertainment and Recreation experienced hiring gains. Decreases were seen in Educational Services, Financial Services, and Utilities.
Geographical hiring: Increases were seen in the Northeast (0.63%), Central (0.53%), and Southeast (0.13%) regions, while the West (-1.21%) experienced a decrease.
What's next? From a historical perspective, April usually has fewer job gains, making this month's results a positive change. Small businesses owners continue to navigate this tight labor market while still actively seeking skilled workers.
Editor's note:
(1) The SBEI illustration is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License. Based on our work at https://www.cbiz.com.
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About CBIZ
CBIZ is a leading provider of financial, insurance and advisory services to businesses throughout the United States. Financial services include accounting, tax, government health care consulting, transaction advisory, risk advisory, and valuation services. Insurance services include employee benefits consulting, retirement plan consulting, property and casualty insurance, payroll, and human capital consulting. With more than 120 offices in 32 states, CBIZ is one of the largest accounting and insurance brokerage providers in the U.S. For more information, visit https://www.cbiz.com.
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