Are Small Businesses Experiencing a Jobs Slump?

Small businesses gained 63,000 jobs during September, according to the ADP National Employment Report. The overall growth for all businesses was 568,000 jobs.

The majority of the small business gain (43,000 jobs) was in businesses of 20-49 employees.

Service providing jobs lead the way in the small business gains with 39,000 jobs in September (9,000 in businesses of 1-19 employees and 30,000 in businesses of 20-49 employees.

Good producing jobs for small businesses added 24,000 jobs in September (11,000 in businesses of 1-19 employees and 14,000 in businesses with 20-49 employees.

Small Businesses Add 63,000 Jobs from August to September

ADP Chief Economist Nela Richardson said that small businesses with fewer than 50 employees saw an average 45% in job gains over the first two quarters of the year. However, during the third quarter, the small businesses saw a slump, seeing a 20% gain in jobs

Why did that happen?

“These (small) firms are the most susceptible – with employees not having full hours if a business is in limited operations,” Richardson said. “There’s also a tug of war for talent, with small businesses having challenges in hiring, and can’t compete in compensation with the larger firms.”

Franchise Businesses Add Only 25,800 Jobs

Franchise jobs saw an 25,800 increase, led by restaurants at 12,400. Auto parts/dealers rose 5,600 while accommodations rose 5,300. Small gains were realized by food retailers (up 200) and real estate (up 100), while business services saw a loss of 300.

Key Take-Aways

• Of the roughly 20 million jobs lost during the pandemic, 14 million have been recovered.
• E-commerce continues growth in retail.
• During 2020, women left the labor force at 4 times the rate of men.
• New unemployment claims have risen in recent weeks.

Overall Stats

In the private sector overall job growth of 568,000 jobs, 354,000 of those jobs are in firms with 1,000 or more employees.

Service providers again took the lead nationally with 466,000 new jobs. The leader is leisure and hospitality, with 226,000 new jobs.

Good news for trade/transportation/utilities, with 54,000 new jobs, the strongest growth since June. Richardson said that a gain in construction jobs is in keeping with the ongoing housing boom.

Images: ADP

This article, "Are Small Businesses Experiencing a Jobs Slump?" was first published on Small Business Trends