What are hiring managers doing, and how is it reflective of the broader economy? That’s the big question this month, with the latest statistics offering somewhat conflicting views of the small business hiring sphere.
ADP, CBIZ and Paychex each published their most recent monthly assessments of small business employment, and they’re not always in agreement. We review the data below — plus, LinkedIn releases its own research on small business hiring that could explain why some analysts see SME hiring levels as lackluster, despite a consensus of broader economic optimism for the rest of the year.
63,000 jobs were added at small businesses in August, said payroll giant ADP in its latest monthly report. That’s up 2,000 jobs from July but a decline from the August average of 84,000 jobs added, on average, to U.S. SMEs. Retailers, health care and technology consultants enjoyed the largest employment gains, said analysts, while manufacturers saw a 4,000 cut in jobs last month. When asked about their hiring practices, SMEs told ADP that they’re largely holding off on any major staff increases as they await the outcome of the U.S. presidential election. ADP’s statistics were released around the same time two other major small business employment assessments were published, offering some different takes on hiring patterns. Check out below the other data on small business employment released last week.
59% of U.S. hiring managers reported difficulty in finding talent with so-called “soft skills,” the kind of skills workplaces need, said LinkedIn in a new report. Analysis found that these soft skills, like organization, communication, teamwork and critical thinking, are even more difficult to find in talent than hard skills, like engineering and coding. LinkedIn Economist Guy Berger posted the result of the survey on LinkedIn and concluded that such soft skills are more difficult to teach to employees, likely accounting for their elusiveness to hiring managers. “Our education system has struggled to develop scalable and effective ways to teach them,” Berger wrote. But reports also said the demand for soft skills could signal a shift away from manufacturing and towards service jobs, which require communication and other interpersonal skills.
23.8% of SMEs increased staff in August, a decline compared to the month before and the first August to show a negative barometer reading in the history of the CBIZ Small Business Employment Index, the company said. The research was surprising, according to CBIZ Employee Services Organization President Philip Noftsinger, considering optimistic economic outlooks for the rest of the year. “As we have seen with previous employment reports, it will be key to watch the real trajectory of the labor market for all market segments to truly understand the takeaway for the broader economy,” the executive said. According to CBIZ, there was a 0.82 percent decrease in month-over-month small business hiring activity for August, with 49.7 percent of firms keeping staffing levels the same as July and 26.5 percent decreasing their staffing levels.
A 0.02% increase in the Paychex | IHS Small Business Jobs Index for August signals modest growth in small business hiring, contrary to what CBIZ found in its own report. The index also yielded a 0.22 percent increase in SME hiring activity from Aug. 2015, reports said. IHS Markit Chief Regional Economist James Diffley reflected on the findings, declaring the index as having plateaued, though at promising levels. The index signals a “trend of steady employment growth,” said Paychex President and CEO Martin Mucci in another statement. The strongest region in the U.S.? Washington, which remained on top of the index thanks to Seattle, which saw the strongest metro employment gain in August with 0.92 percent.