Sudden SME Hiring Slump Shouldn’t Concern, Says CBIZ

The latest CBIZ Small Business Employment Index (SEBI), released Friday (Feb. 3) and reporting on small business hiring activity for January, showed a decline that analysts say shouldn’t necessarily be met with concern.

The index recorded a 3.12 percent month-over-month decline in small business hiring for the month of January. It’s a significant turnaround compared to the last reading, which found a 1.60 percent increase in hiring for December.

But according to CBIZ Employee Services Organization President Philip Noftsinger, the reading isn’t necessarily a major shift when compared to yearly trends.

“When compared with previous January periods, this reading of the SEBI doesn’t in itself suggest a sentiment shift among small business owners,” he stated. “Rather, this reading is a natural result in January as owners adjust out of the high retail season in December. However, it’s vital that we see the months ahead demonstrate better results than the historical averages to support the notion that January isn’t a warning of changing expectations.”

The report also said that small businesses tend to take their time, not only in the midst of a new year and the end of holiday season but as well as in political and economic change.

“As the new administration works to gain its footing and translate campaign promises into political action, small business owners will need to watch larger economic trends unfold as opposed to focusing on single macroeconomic data points to draw conclusions,” the company said in its announcement.

CBIZ added that the results should be read in the context of new data from ADP and Moody’s Analytics, which recorded that 246,000 jobs were added across U.S. businesses in January, far surpassing analyst expectations of 168,000 jobs.

The insurance sector was reportedly the only industry in which small business hiring increased in January, CBIZ said, while all other sectors saw declines for the month.