Small Businesses Report Substantial Decline in January Hiring Trends
The CBIZ Small Business Employment Index reverses year-end growth and indicates its largest seasonally adjusted decline since
“Vaccine optimism and a robust holiday season helped small businesses close the year strong; however, the pandemic’s impact continues to be felt across the sector,” said
The ADP and Moody’s employment report showed a more encouraging reading for January, with an increase of 174,000 private-sector jobs on a month-over-month, seasonally adjusted basis. Small businesses reported 51,000 additional 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.
From a geographic view, all four regions reported declines in the CBIZ SBEI, with the Northeast (-4.20%) and West (-4.18%) impacted most severely. This aligns with trends related to COVID-19 restrictions and resulting business closures. The Central (-0.46%) and Southeast (-0.23%) regions showed more modest employment dips.
Hiring also showed widespread declines at the industry level. Industries with the greatest pullbacks were Accommodation and Food Services and
“The CBIZ SBEI mirrors broader business-closure trends in both the industrial and regional data,” Noftsinger added. “We’ll be closely monitoring these trends and how small businesses react as we progress through the first quarter.”
To view an infographic with data from the employment index, visit the CBIZ website.
Additional takeaways from the January SBEI include:
January’s snapshot: 15.3% of companies in the index grew their workforces, 51.4% reported unchanged employment levels and 33.3% reduced their workforces.
Industries at a glance: Hiring trended negatively in almost every industry, including Accommodation and Food Services,
Geographical hiring: Throughout the
What’s next? Current headwinds such as COVID-19 restrictions and winter weather could continue to put pressure on small businesses this quarter, which fiscal support could help to alleviate.
(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.