According to the latest CBIZ Small Business Employment Index (SBEI), small businesses, aside from those in the technology industry, are showing resilience and a willingness to hire talent, as well as a seasonally adjusted increase of 1.36% in hiring in March.
“In light of the Silicon Valley Bank failure, the contraction of the tech industry is highlighted in the March SBEI report,” Anna Rathbun, CFA, chief investment officer of CBIZ Investment Advisory Services, said. “The weakness in technology and life sciences has been ongoing since 2022 and is expected to continue into 2023. As a result, we may see further challenges in hiring for tech positions due to continued financial liquidity concerns.”
The Bureau of Labor Statistics’ employment report indicated hiring growth that barely missed expectations in March. The March reading showed an overall increase of 236,000 private-sector jobs. Given the overall hiring growth, the national unemployment rate stayed relatively flat at 3.5%. The report is inclusive of all non-farm private employers across businesses of all sizes. Meanwhile, the ADP employment report indicated hiring growth among small, medium-sized and large companies. Its March reading showed an overall increase of 145,000 private-sector jobs for the month. Small businesses accounted for an increase of 101,000 of those jobs on a seasonally adjusted, month-over-month basis. The ADP report counts small businesses as companies with 49 or fewer employees, while the CBIZ SBEI uses data from companies with 300 employees or fewer.
The CBIZ SBEI regional data showed a hiring increase in every region of the United States in March. The Northeast experienced a 2.23% increase, the largest hiring increase, followed by the Central (1.43%), West (0.87%) and Southeast (0.63%) regions.
On an industry level, the most notable job gains were experienced in agriculture, fishing and hunting, and arts, entertainment and recreation. Rental and leasing services and technology and life sciences all experienced declines in hiring.
“With the spring and summer months quickly approaching, we’re seeing a particular hiring focus in service-oriented sectors such as arts, entertainment and recreation, as well as accommodation and food services,” Rathbun said. “However, the recent SVB failure is expected to curb lending activity by banks. Small businesses are likely to be most directly impacted by tightening financial conditions, and it may influence hiring decisions in the coming months.”
