Though hiring activity historically winds down in September, small businesses brought on new employees instead of scaling back as they usually do when summer ends. The CBIZ Small Business Employment Index (SBEI) reported significant growth to end the third quarter, with a seasonally adjusted increase of 1.5% for September.
The index tracks payroll and hiring trends for over 3,400 companies that have 300 or fewer employees, providing broad insight into small business trends, and the upswing in September 2020 reflects the volatile nature of the current employment landscape.
“The hiring growth reported in September is a surprise and shows some optimism for the sector heading into the end of the year,” said Philip Noftsinger, executive vice president of CBIZ, Inc. “Businesses typically decrease their payrolls as students return to school. The increase in September 2020 speaks to economic recovery, offsetting analyst fears that further improvement might stall.”
The growth is mirrored by the ADP and Moody’s employment report, which showed an increase of 749,000 private-sector jobs on a month-over-month, seasonally adjusted basis. Jobs increased by 192,000 for small businesses. 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.
All four regions tracked by the CBIZ SBEI posted growth in September. The Central (1.55%) had the greatest growth, followed by the Southeast (1.39%), West (1.27%) and Northeast (0.79%). The CBIZ SBEI continued to monitor small business hiring against the backdrop of state reopenings.
On an industry level, the CBIZ SBEI reported mixed results. Transportation, Information, Educational Services and Healthcare showed notable hiring growth, but hiring decreased in Real Estate, Retail Trade and Professional Services.
“Several industries are not operating at full capacity, but this could change if a vaccine comes into play and more businesses are able to fully open,” Noftsinger added. “As we move through the fourth quarter, we’ll also be carefully watching the data from states that opened after May 15. The data currently suggests that these states are lifting restrictions, which is promoting hiring growth and a good sign for the economy as a whole.”
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