The CBIZ Small Business Employment Index reported a notable decrease in hiring in JanuaryThe 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.
February 07, 2023 08:30 AM Eastern Standard Time–CLEVELAND–(BUSINESS WIRE)–The CBIZ Small Business Employment Index (“SBEI”) reported a seasonally adjusted decrease of 1.97% in January. The data for this month shows some weakness in small business hiring as activities surrounding the holiday season subside.
“From a historical perspective, January’s job loss rate was fairly average,” said Anna Rathbun, CFA, Chief Investment Officer, CBIZ Investment Advisory Services, LLC. “This is a seasonal trend, and the data does not lead me to believe that something fundamental has shifted in the labor market for small businesses.”
In contrast to the SBEI, the Bureau of Labor Statistics’ employment report indicated hiring growth that beat expectations. The January reading showed an overall increase of 517,000 private-sector jobs. Given the overall hiring growth, the national unemployment rate dropped a small amount to 3.4%. The report is inclusive of all non-farm private employers across businesses of all sizes. Meanwhile, the ADP employment report showed an overall increase of 106,000 private-sector jobs for the month. Despite the overall hiring growth, small businesses accounted for a decrease of 75,000 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 a hiring decline in every region of the United States in January. The Northeast (-2.60%) reported the largest hiring decrease, followed by the Central (-1.83%), Southeast (-1.83%) and West (-1.70%) regions.
From an industry perspective, 23 out of the 25 industries represented in the CBIZ Small Business Employment Index experienced job losses. Arts, Entertainment and Recreation, and Retail saw the largest declines in hiring.
“The American labor market is full of conflicting information at this time,” added Rathbun. “As layoff announcements by large corporations dominate the headlines, small businesses are still in search of skilled labor.”
To view an infographic with data from the employment index, visit the CBIZ website here.
Additional takeaways from the January SBEI include:
January’s snapshot: 16% of companies in the index increased staffing, 54% made no change to their headcounts and 30% reduced employment totals.
Industries at-a-glance: Arts, Entertainment and Recreation, and Retail saw the largest declines in hiring. Among the 25 industries represented in the CBIZ Small Business Employment Index 23 of them saw hiring decreases.
Geographical hiring: The Northeast (-2.60%), Central (-1.83%), Southeast (-1.83%) and West (-1.70%) regions all experienced hiring decreases.
What’s next? Compared to historical trends, there is a higher percentage of small firms trying to keep their existing employees as shortage of skilled labor persists. January’s data was in-line with the historical averages, and not a notable indicator of small businesses signaling distress.
(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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CBIZ, Inc. 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 100 Company offices in 32 states, CBIZ is one of the largest accounting and insurance brokerage providers in the U.S. For more information, visit www.cbiz.com.