Hiring at sma
Hiring at small businesses grew significantly last month, returning to levels before the pandemic, according to payroll giant Paychex.
The Paychex | IHS Markit Small Business Employment Watch showed a 4.33 percent increase in hiring in April, bringing the Small Business Jobs Index to 98.34 in April, a sign of job growth returning to pre-pandemic levels. Each region of the country, state and metropolitan area saw job gains, with the South leading all regions. Texas took the top spot for job growth among states.
The numbers reflect a strong bounce back in the economy this year as businesses emerge from the COVID-19 pandemic thanks to the proliferation of vaccines.
“This was a pretty big jump back up,” said Frank Fiorille, vice president of risk management, compliance and data analytics at Paychex. “It’s almost above the pre-pandemic level.”
He estimated about two-thirds of the increase is mostly due to a base comparison year over year with the lows seen in hiring in April 2020, when the coronavirus really started hitting payrolls and caused mass layoffs. But the other one-third is more like organic growth month over month since March, particularly in the leisure and hospitality sector, which is showing encouraging signs of recovery.
“We had really big growth in that segment, as restaurants seem like they’re turning their lights back on and coming online as people go out as things get better,” said Fiorille.
Paychex has also seen strong wage growth in the leisure and hospitality sector this past month. “One of the big concerns for small to medium-size businesses is they can’t find people to work,” said Firorille. “These types of businesses have to increase wages. We saw that in the number this month. There are a lot of stories about how people are paying bonuses and money just to come in and fill out an application. We’re seeing that in the starting wages too. Overall, it was a real strong month and will just continue in the summer.”
Across all industries, however, hourly earnings growth slowed slightly in April to 2.84 percent, the first decrease of 2021. Weekly earnings growth settled in at 3.43 percent in April. The number of weekly hours worked growth retreated slightly in April but stayed positive year-over-year at 0.44 percent.