Small Business Hiring Dropped to Record Lows in April as Economic Slowdown Persists
The CBIZ Small Business Employment Index revealed the largest single-month decline in the report’s 11-year history
The CBIZ Small Business Employment Index (“SBEI”) reported a staggering seasonally adjusted 9.43% decrease in small business hiring in April. This underscores the devastating impact the coronavirus pandemic has had on small businesses nationwide and represents the sharpest single-month decline since the index’s inception following the 2008-2009 recession. 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.
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“Importantly, the nearly 10% hiring decline represents companies that remained in business in both March and April, indicating that the impact is even greater when considering business closures.”
“As we move into the depths of the coronavirus pandemic, we see the heavy impact of the economic slowdown on small businesses,” said Philip Noftsinger, Executive Vice President, CBIZ, Inc. “Importantly, the nearly 10% hiring decline represents companies that remained in business in both March and April, indicating that the impact is even greater when considering business closures.”
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The impact of the pandemic was also evident in the ADP and Moody’s employment report, which surpassed job losses seen in the Great Recession. Overall, the private sector reported over 20 million job losses on a month-over-month, seasonally adjusted basis, according to the ADP and Moody’s data. Large businesses had the greatest pull back, declining by 8,963,000 jobs. Small businesses, in comparison, decreased by 6,005,000 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.
Mapping the CBIZ SBEI by region, hiring charted negatively throughout the United States, with the Central (-8.91%) and Southeast (-8.27%) regions faring relatively better than the Northeast (-12.15%) and West (-11.41%). A similar scene played out in the various industrial sectors. While all industries in the index saw hiring decreases, especially noteworthy declines occurred in Non-Profits, Professional Services, Manufacturing, Healthcare and Retail.
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