Although small-business hiring dropped by 0.89 percent during October, it represents a slight recovery after a decline of 2.55 percent in September, according to the CBIZ Small Business Employment Index, a barometer measuring hiring trends for more than 3,500 companies with 300 or fewer employees.
This metric comes soon after ADP’s October jobs survey that showed the private sector created 158,000 jobs, which is higher than analysts’ estimates and September’s revised tally of 114,000 new jobs.
“Although the actual SBEI metric shows a decline of 0.89 percent, the number of companies hiring exceeded those decreasing employment,” says Philip Noftsinger, business unit president for CBIZ Payroll Services. “At a minimum, we can view this month’s numbers as stable in terms of small-business employment levels, but the number of firms hiring is encouraging.”
Twenty-five percent respondents report bringing in more employees, and 24 percent of respondents say they reduced staff. Another 51 percent of respondents say their employee numbers remained the same.
CBIZ Payroll Services maintains that if demand growth continues along with a resolution regarding the fiscal cliff, positive employment movement could be reported during the fourth quarter; however, leadership in Washington must have the ability to handle the pending fiscal cliff and instill confidence in the marketplace. A long-term solution should be implemented instead of simply delaying the deadline for another year.
“Businesses want longer-term predictability, similar to what the Fed Chairman is projecting with regards to interest rates,” Noftsigner says. “Small-business owners are more adept at long-term planning than they were pre-recession, and they are not motivated by short-term solutions to major economic issues and the volatility they present.”