Hiring gains seen in three out of the four regions in the U.S.
New data from the CBiz Small Business Employment Index reflects a 1.9% increase in June 2023
July 11, 2023 — CLEVELAND–(BUSINESS WIRE)–The CBIZ Small Business Employment Index (“SBEI”) reported a seasonally adjusted increase of 1.98% in June. Seasonal trends contributed to the employment gains as the summer months typically require additional hiring in recreational activities. The CBIZ SBEI tracks payroll and hiring trends for over 3,200 companies that have 300 or fewer employees, providing broad insight into small business trends.
“June’s employment data for small businesses shows a robust labor market where employers are hiring at a healthy pace amid a skilled labor shortage,” said Anna Rathbun, CFA, Chief Investment Officer, CBIZ Investment Advisory Services, LLC. “Part of the rise in hiring can be attributed to seasonal trends as summer typically brings a demand for extra personnel in recreational sectors.”
Missed Expectations
The Bureau of Labor Statistics’ employment report indicated hiring growth that missed expectations. The June reading showed an overall increase of 209,000 private-sector jobs. Given the overall hiring growth, the national unemployment rate stayed relatively flat at 3.6%. 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 and medium-sized companies. Its June reading showed an overall increase of 497,000 private-sector jobs for the month. Small businesses accounted for an increase of 299,000 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.
From a regional perspective, the CBIZ SBEI data reported the largest increase in hiring in the Central (2.67%) region followed by the Northeast (2.45%). The Southeast (0.78%) experienced a minor increase, while the West (-0.02%) remained flat.
Nearly all industries in the June reading experienced gains in employment. The most notable increases were seen in Administration and Support Services, Arts, Entertainment and Recreation, and Rental and Leasing Services.
A Competitive Small Business Landscape
Rathbun added, “The strength in the totality of this month’s Small Business Employment Index reflects a competitive landscape for the small business market, where hiring talent is a priority amidst the labor shortage. Business owners are looking to hire first and manage their margins later.”
To view an infographic with data from the employment index, visit the CBIZ website.
Additional takeaways from the June SBEI include:
- June’s snapshot: 28% of companies in the index increased staffing, 56% made no change to their headcounts and 16% reduced employment totals.
- Industries at-a-glance: The CBIZ Small Business Employment Index reported a hiring increase in nearly all industries. Administration and Support Services, Arts, Entertainment and Recreation, and Rental and Leasing Services experienced the most notable hiring gains.
- Geographical hiring: The Central (2.67%), Northeast (2.45%) and Southeast (0.78%) regions reported job gains followed by the West (-0.02%) which remained flat.
- What’s next? With a slowdown experienced in consumer spending, the management of margins for small business owners may become a priority as the pace of the economy slows.
