Small Businesses Report Sharp Hiring Declines in May

Rhea-AI Summary

The CBIZ Small Business Employment Index (SBEI) reported a 1.91% decrease in May, reversing positive hiring trends from April. This decline affects companies with 300 or fewer employees and reflects rising operational costs and consumer economic pressures. Notably, small businesses accounted for a decline of 91,000 jobs while the overall job market saw an increase of 128,000 private-sector jobs.

The West and Southeast regions experienced the largest hiring drops, and while Professional Services saw gains, other sectors like Manufacturing and Retail faced declines.

Positive

• Professional Services sector reported hiring gains.

Negative

• 1.91% decrease in the SBEI, indicating negative employment trends.
• 91,000 job loss in small businesses on a seasonally adjusted basis.
• Largest declines in the West (-3.09%) and Southeast (-2.10%).
• Manufacturing and Retail sectors experienced hiring declines.

The CBIZ Small Business Employment Index reversed positive hiring growth seen in previous months, signaling changes ahead of summer months

CLEVELAND--(BUSINESS WIRE)-- The CBIZ Small Business Employment Index (“SBEI”) reported a seasonally adjusted decrease of 1.91% in May, a stark change from the unseasonably strong hiring growth found in the April report. The CBIZ SBEI tracks payroll and hiring trends for over 3,600 companies that have 300 or fewer employees, providing broad insight into small business trends.

“The weakness in employment reflects growing uncertainties for companies, as the cost of running a business increases and consumers react to larger economic pressures,” said Anna Rathbun, CFA, Chief Investment Officer, CBIZ, Inc. “This sentiment is reflected across industries. One example is in the noted manufacturing jobs decline, which corroborates the recent weakness in manufacturing reported in regional Federal Reserve Bank surveys.”

The ADP and Moody’s employment report indicated hiring growth among small, medium-sized and large companies. Its May reading showed an overall increase of 128,000 private-sector jobs for the month. Despite the overall hiring growth small businesses accounted for a decline of 91,000 of those jobs on a seasonally adjusted, month-over-month basis. 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.

The CBIZ SBEI reported depressed hiring in all four regions measured. The West (-3.09%) and Southeast (-2.10%) regions showed the largest declines. The Northeast (-1.78%) and Central (-1.62%) both experienced smaller reductions.

On an industry level, the most notable hiring increase was seen in Professional Services. Accommodations and Food Services, Arts and Entertainment, Manufacturing, and Retail experienced hiring declines.

“May’s numbers reflect consumers’ inflation pain points and anticipated challenges ahead,” added Rathbun. “Consumers are tightening their belts which means the Retail and Arts and Entertainment industries are likely to continue to adjust their hiring accordingly.”

To view an infographic with data from the employment index, visit the CBIZ website.

Additional takeaways from the May SBEI include:

May’s snapshot: 22% of companies in the index increased staffing, 53% made no change to their headcounts and 25% reduced employment totals.

Industries at a glance: The Professional Services sector reported hiring gains. Meanwhile, declines were reported in Accommodations and Food Services, Arts and Entertainment, Manufacturing, and Retail.

Geographical hiring: The West (-3.09%), Southeast (-2.10%), Northeast (-1.78%) and Central (-1.62%) regions all experienced hiring decreases.

What’s next? Small businesses are continuing to be affected by inflation. As larger volatility affects the market, businesses of all sizes are calling for hiring freezes or conducting layoffs reflecting a less certain environment at a high level.

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.

Follow CBIZ on Twitter at @CBZ or on Facebook.

About CBIZ

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 31 states, CBIZ is one of the largest accounting and insurance brokerage providers in the U.S. For more information, visit www.cbiz.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220603005073/en/

Kara Lester

Gregory FCA for CBIZ

Kara@gregoryfca.com

610-228-2119

Source: CBIZ, Inc.

FAQ

What does the May 2023 CBIZ Small Business Employment Index report indicate about hiring trends?

The May 2023 CBIZ Small Business Employment Index reported a 1.91% decrease in hiring, reversing positive trends seen in April.

How many jobs did small businesses lose according to the CBIZ SBEI report?

According to the CBIZ SBEI report, small businesses lost 91,000 jobs on a seasonally adjusted basis in May 2023.

Which region experienced the largest hiring decline in May 2023 according to the CBIZ report?

The West region experienced the largest hiring decline, reporting a decrease of 3.09%.

What sectors saw hiring declines in the May 2023 CBIZ report?

Sectors that saw hiring declines included Manufacturing, Retail, and Arts and Entertainment.

What is the overall job market trend for May 2023 according to the ADP report?

The overall job market saw an increase of 128,000 private-sector jobs in May 2023.