January 23, 2021

CBIZ Small Business Employment Index finds hiring increased substantially

Small businesses were active in their hiring during September, according to the latest CBIZ Small Business Employment Index.

Independence-based business services firm CBIZ Inc. (NYSE: CBZ) said in a news release on Friday, Oct. 2, that the index rose by a seasonally adjusted 1.5% last month — a strong performance by historical standards, given that hiring “usually winds down in September, as summer comes to a close and businesses scale back their headcounts.”

The upswing in September “underscores the volatile nature of the current employment landscape,” CBIZ said.

The CBIZ index certainly has reflected that volatility. The index, which tracks payroll and hiring trends for more than 3,400 companies nationwide that have 300 or fewer employees, fell by 0.48% in August, breaking a positive trend of gains of 1.25% in July and 1.8% in June. It had dropped 2.5% in May and 9.4% in April, when the pandemic kept many businesses shuttered.

“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, in a statement. “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.”

CBIZ said the index found all regions of the country posted small business job growth in September. The Central region, at 1.55%, had the strongest growth, followed by the Southeast (1.39%), West (1.27%) and Northeast (0.79%). While hiring “increased mildly among states that opened on or before May 15 (0.72%), it increased more robustly among states that opened after May 15 (1.6%),” CBIZ said.

The index found that 24% of companies increased staffing, 52% reported no change and 24% reduced staffing.

CBIZ said growth was strongest in the transportation, information, educational services and health care sectors. 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 said. “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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