Small Business Hiring Dropped to Record Lows in April as Economic Slowdown Persists

The CBIZ Small Business Employment Index revealed the largest single-month decline in the report’s 11-year history

CLEVELAND--()--The CBIZ Small Business Employment Index (“SBEI”) reported a staggering seasonally adjusted 9.43% decrease in small business hiring in April. This underscores the devastating impact the coronavirus pandemic has had on small businesses nationwide and represents the sharpest single-month decline since the index’s inception following the 2008-2009 recession. 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.

“As we move into the depths of the coronavirus pandemic, we see the heavy impact of the economic slowdown on small businesses,” said Philip Noftsinger, Executive Vice President, CBIZ, Inc. “Importantly, the nearly 10% hiring decline represents companies that remained in business in both March and April, indicating that the impact is even greater when considering business closures.”

The impact of the pandemic was also evident in the ADP and Moody’s employment report, which surpassed job losses seen in the Great Recession. Overall, the private sector reported over 20 million job losses on a month-over-month, seasonally adjusted basis, according to the ADP and Moody’s data. Large businesses had the greatest pull back, declining by 8,963,000 jobs. Small businesses, in comparison, decreased by 6,005,000 jobs. 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.

Mapping the CBIZ SBEI by region, hiring charted negatively throughout the United States, with the Central (-8.91%) and Southeast (-8.27%) regions faring relatively better than the Northeast (-12.15%) and West (-11.41%). A similar scene played out in the various industrial sectors. While all industries in the index saw hiring decreases, especially noteworthy declines occurred in Non-Profits, Professional Services, Manufacturing, Healthcare and Retail.

Over the coming months, states will design their plans for reopening as the federal government considers additional stimulus measures. Noftsinger continues to track the small business ecosystem, noting: “We will watch closely how small businesses are impacted not only by the churning economic conditions they face, but also by the economic efforts aimed at their stability.”

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

Additional takeaways from the April SBEI include:

April’s snapshot: 13% of companies in the index increased staffing, 45% left staffing unchanged and 42% decreased staffing.

Industries at a glance: None of the industries in the index displayed hiring growth. Hiring declined most substantially in the Non-Profits, Professional Services, Manufacturing, Healthcare and Retail sectors. Other industries saw hiring decline less than 4%, including Financial Services, Insurance, Wholesale Distribution and Construction.

Geographical hiring: Echoing the regional impact of the coronavirus pandemic, the Northeast and the West experienced the most sizable hiring decreases. The Central and Southeast regions also experienced declines but to a lesser extent.

What’s next? Governmental decisions will continue to play a large role in small business trends, as states consider reopening and additional stimulus measures could be implemented.

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.

Contacts

Media
Sandy McKenzie
Gregory FCA for CBIZ
sandy@gregoryfca.com
610-228-2147

Contacts

Media
Sandy McKenzie
Gregory FCA for CBIZ
sandy@gregoryfca.com
610-228-2147