Companies Debate Small Business Hiring Growth
The cost-saving efforts of the U.S. tax reform are beginning to manifest in the small business market, as financial services and business consultant CBIZ, Inc. recorded a bump in its Small Business Employment Index (SBEI) in March.
February's disappointing results of a slight decrease in hiring among small businesses was redeemed last month when the SBEI showed a 1.39% increase, following a survey of thousands of companies with 300 or fewer employees released on April 6. Less than one-fifth of respondents decreased in hiring but were outweighed by the nearly 30% of businesses that said they increased hiring. In a press release on April 6, CBIZ Employee Services Organization President Philip Noftsinger likened this boost to the tax cuts.
"As small business owners begin to realize the benefits of tax reform, they will likely translate to better wages and more jobs," Noftsinger said in the release. "Almost every industry represented in our SBEI grew their staff totals in March, so if this positive trend continues, the economy could be seeing solid growth across the board going forward."
Years past have shown similar results in March hiring numbers, which economists have attributed to better weather. However, CBIZ's results were contradicted by the Small Business Jobs Index conducted by Paychex, Inc., which provides payroll, human resource and benefits outsourcing services for small- to medium-sized businesses (SMBs). On April 3, Paychex reported a decrease in small business employment growth of 0.12%—the lowest point since 2011, IHS Markit Chief Regional Economist James Diffley said in the report.
Despite Paychex's recorded dip in hiring, the report said wages in March 2018 increased about 2.7% over the prior year.
-Andrew Michaels, editorial associate