CLEVELAND--(BUSINESS WIRE)--The CBIZ Small Business Employment Index (“SBEI”) reported a seasonally adjusted increase of 1.36% in March. Small businesses, aside from the tech industry, are showing resilience and a willingness to hire talent. 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.
“In light of the Silicon Valley Bank failure, the contraction of the tech industry is highlighted in the March SBEI report,” said Anna Rathbun, CFA, Chief Investment Officer, CBIZ Investment Advisory Services, LLC. “The weakness in technology and life sciences has been ongoing since 2022 and is expected to continue into 2023. As a result, we may see further challenges in hiring for tech positions due to continued financial liquidity concerns."
The Bureau of Labor Statistics’ employment report indicated hiring growth that barely missed expectations. The March reading showed an overall increase of 236,000 private-sector jobs. Given the overall hiring growth, the national unemployment rate stayed relatively flat at 3.5%. 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, medium-sized and large companies. Its March reading showed an overall increase of 145,000 private-sector jobs for the month. Small businesses accounted for an increase of 101,000 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 increase in every region of the United States in March. The Northeast (2.23%) reported the largest hiring increase, followed by the Central (1.43%), West (0.87%), and Southeast (0.63%) regions.
On an industry level, the most notable job gains were seen in Agriculture, Fishing and Hunting, and Arts, Entertainment and Recreation. Rental and Leasing Services, and Technology and Life Sciences all experienced declines in hiring.
"With the spring and summer months quickly approaching, we're seeing a particular hiring focus in service-oriented sectors such as Arts, Entertainment and Recreation, as well as Accommodation and Food Services," Rathbun added. “However, the recent SVB failure is expected to curb lending activity by banks. Small businesses are likely to be most directly impacted by tightening financial conditions, and it may influence hiring decisions in the coming months.”
To view an infographic with data from the employment index, visit the CBIZ website.
Additional takeaways from the March SBEI include:
March’s snapshot: 24% of companies in the index increased staffing, 59% made no change to their headcounts and 17% reduced employment totals.
Industries at-a-glance: Agriculture, Fishing and Hunting, and Arts, Entertainment and Recreation experienced hiring gains. Decreases were seen in Rental and Leasing Services, and Technology and Life Sciences.
Geographical hiring: The Northeast (2.23%), Central (1.43%), West (0.87%), and Southeast (0.63%) regions all experienced hiring increases.
What’s next? Despite the challenges faced by small businesses in recent market volatility, there is a glimmer of hope on the horizon. There is a level of resilience and determination amongst small business owners, as they continue to adapt and navigate uncertain waters.
(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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