The CBIZ Small Business Employment Index (SBEI), a barometer for small business hiring trends that surveys approximately 4,000 companies employing 300 or fewer people, reported a month-over-month decrease in hiring of 3.14 percent in January, a historically negative period for hiring following the holiday season.
Forty-six percent of companies in the index did not change their staff totals, while 19 percent of companies increased headcounts and 35 percent reduced the size of their staff. Since the index's inception nine years ago, the January period has always posted a negative figure, averaging a decrease of 2.92 percent. Every industry tracked by the SBEI experienced staff reductions this month. The largest cuts were experienced by companies in the Arts & Entertainment, Technology, Retail Trade, Accommodation and Food Services and Wholesale Distribution industries. Similarly, all four regions experienced declines in hiring, as well.
The impact of tax reform will take some time to realize, especially for unincorporated businesses that realize their tax burden through individual tax returns. While corporate tax cuts are usually good for hiring, the labor supply is already tight and it remains to be seen how low unemployment can go.
The SBEI illustration is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.