Small Business Hiring Trends End the Year on a Positive Note
The CBIZ Small Business Employment Index (SBEI) reported a 0.32% increase in December 2020, indicating resilience among small businesses amid COVID-19. Data revealed that 27.63% of companies added staff, with notable hiring growth in Healthcare, Financial Services, and Retail Trade. However, small business jobs decreased by 13,000 according to ADP and Moody’s. Regional hiring varied, with the Northeast seeing a 1.18% increase. Optimism remains for 2021, contingent on consumer sentiment and vaccination efforts, according to Executive VP Philip Noftsinger.
- 0.32% increase in the CBIZ SBEI in December 2020.
- 27.63% of companies reported hiring increases.
- Growth observed in Healthcare, Financial Services, Real Estate, Non-Profits, and Retail Trade.
- Hiring growth in the Northeast (1.18%), Southeast (1%), and West (0.44%).
- Small business jobs decreased by 13,000 according to ADP and Moody’s data.
- Hiring declined in Technology, Life Sciences, Transportation, and Accommodation and Food Services.
The CBIZ Small Business Employment Index (“SBEI”) reported growth in December, closing out 2020 with a seasonally adjusted increase of
“The data indicates that small businesses weathered the third COVID-19 surge in December, and we expect positive trends to continue into early 2021, with vaccine optimism likely to bolster consumer sentiment through the early part of the year,” said Philip Noftsinger, Executive Vice President, CBIZ, Inc. “However, if general sentiment surrounding the pandemic outlook does not improve in Q2, continued economic recovery could taper.”
Data from the ADP and Moody’s employment report was not as bullish as the CBIZ SBEI. According to the ADP and Moody’s data, private-sector jobs dropped by 123,000 on a month-over-month, seasonally adjusted basis. Small business jobs, in particular, decreased by 13,000. The ADP and Moody’s report counts small businesses as companies with 49 or fewer employees, while the CBIZ SBEI uses data from companies with 300 employees or fewer.
Breaking the data down by region, hiring declined mildly in the Central U.S. (-
Although some industries increased hiring, growth did not occur across the board. Hiring climbed in Healthcare, Financial Services, Real Estate, Non-Profits and Retail Trade, yet decreased in Technology and Life Sciences, Transportation, and Accommodation and Food Services. The negative trend in Accommodation and Food Services could stem from renewed COVID-19 restrictions.
“Based on the current vaccination rate in the U.S., we still have a long road ahead,” Noftsinger noted. “Yet, we are confident that small business trends will end 2021 with vast improvement over the past few quarters.”
To view an infographic with data from the employment index, visit the CBIZ website.
Additional takeaways from the December SBEI include:
December’s snapshot:
Industries at a glance: Hiring fared favorably for Healthcare, Financial Services, Real Estate, Non-Profits and Retail Trade. This was not the case for Technology and Life Sciences, Transportation, and Accommodation and Food Services, where hiring receded.
Geographical hiring: Only the Central U.S. reported a hiring decline. Hiring saw the most robust increase in the Northeast, followed by the Southeast and then the West.
What’s next? Moving past the holiday shopping season, consumer sentiment remains key, and the COVID-19 vaccination rate will likely help determine small business hiring trends in 2021.
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, Inc.
CBIZ, Inc. provides professional business services that help clients better manage their finances and employees. CBIZ provides its clients with financial services including accounting, tax, financial advisory, government health care consulting, risk advisory, real estate consulting and valuation services. Employee services include employee benefits consulting, property and casualty insurance, retirement plan consulting, payroll, life insurance, HR consulting and executive recruitment. As one of the largest accounting, insurance brokerage and valuation companies in the United States, the company’s services are provided through more than 100 company offices in 33 states. CBIZ Employee Services Organization is a division of CBIZ Benefits & Insurance Services, Inc.
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