Small Businesses Report Stagnant in April

The CBIZ Small Business Employment Index reported flat reading heading into the summer as business owners remain in need of skilled staff

The CBIZ Small Business Employment Index (“SBEI”) reported a seasonally adjusted increase of 0.01% in April. Despite economic headwinds, small business owners continue to search for skilled workers. The CBIZ SBEI tracks payroll and hiring trends for over 3,300 companies that have 300 or fewer employees, providing broad insight into small business trends.

“Despite economic challenges, small businesses continue to prioritize hiring skilled staff,” said Anna Rathbun, CFA, Chief Investment Officer, CBIZ Investment Advisory Services, LLC. “While inflation and higher borrowing costs pose as headwinds, the tight labor market has created a strong environment for hiring particularly in the service industry.”

The Bureau of Labor Statistics’ employment report indicated hiring growth that beat expectations. The April reading showed an overall increase of 253,000 private-sector jobs. Given the overall hiring growth, the national unemployment rate fell slightly to 3.4%. The report is inclusive of all non-farm private employers across businesses of all sizes. Similarly, the ADP employment report indicated hiring growth among small, medium-sized and large companies. Its April reading showed an overall increase of 296,000 private-sector jobs for the month. Small businesses accounted for an increase of 121,000 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.

The CBIZ SBEI regional data showed the largest contraction in hiring in the Southeast (-1.49%) followed by the West (-0.41%). The Northeast (1.01%) experienced the largest increase in hiring, with the Central region (0.32%) lagging behind.

On an industry level, the most notable job gains were seen in Administration Services, Arts, Entertainment and Recreation, and Real Estate. Financial Services, Management, and Information and Technology all experienced declines in hiring.

Rathbun added, “The hiring declines observed in Financial Services is not surprising given the current environment and nervousness around the banking system, and we are also facing ongoing layoffs in tech that are expected to continue well into 2023."

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, 58% made no change to their headcounts and 23% reduced employment totals.

Industries at-a-glance: Administration Services, Arts, Entertainment and Recreation, and Real Estate experienced hiring gains. Decreases were seen in Financial Services, Management, and Information and Technology.

Geographical hiring: The Southeast (-1.49%) and West (-0.41%) regions both experienced declines in hiring, while the Northeast (1.01%) and Central (0.32%) regions experienced hiring gains.

What’s next? As small businesses continue to navigate the ever-changing landscape of hiring, many are focusing on implementing innovative strategies to attract and retain top talent.

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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