Small Business Hiring Ticks up Slightly; Layoffs at Lowest Point in September
SAN LEANDRO, Calif. – October 22, 2010 – Innovative small technology and services companies slightly increased hiring by 0.79% during September, while layoffs continued to decline, further decreasing by 42.4%. Both of these trends are good news for small companies as they close the third quarter. This key insight is delivered by the September-released TriNet Human Capital Index (HCI), a monthly report that provides direct visibility into the employment practices of thousands of small technology, professional services and financial services companies driving innovation and growth in the United States economy.
TriNet, the largest private company delivering outsourced human capital services to high-performing small companies, developed the Human Capital Index with real-time data from 3000 companies ranging from 10 – 200 employees earning an average of about $75,000 in annual salary.
Small Company Hiring Showed Stability
“Despite new government incentives, to date representing $29.6 billion in small business lending and recovery loans granted by the Small Business Administration (SBA), small high-wage companies are not adding new employees as rapidly as they were last September,” said Jimmy Franzone, TriNet’s vice president of corporate development. The decline in hiring began in the last quarter of 2009, leading to a 19% decrease from September 2009 to September 2010, the period during which we tracked data for the TriNet Hiring Index. While hiring has overall slowed in small companies, layoffs have also continued to slow, indicating that small employers continue to be in a period of stability, focusing acutely on productivity improvement.
The TriNet Hiring Index increased 1 point in September to a monthly reading of 81. Values below 100 indicate a slower rate of hiring compared to the base month of September 2009, when TriNet started compiling data for the HCI. The data from the companies TriNet tracked during this past year indicate the rate of hiring has been below that of the professional and business services sector since November 2009, reaching a low in August 2010 but rebounding in September. Layoff trends in small, high wage companies has trended below that of the professional and business sectors at large, with steadily declining rates of layoffs, reaching a low point in the past twelve months this September.
Layoffs Continue to Decrease
The pace of small-company layoffs remains well below 2009 numbers, and remains below the layoff rate in the broader economy. The employment termination rate in TriNet’s study population further decreased by 42.4% in September, compared with an increase in layoffs of 3.57% in the broader U.S. professional and business services sector. This general pattern of more modest levels of termination in the TriNet study has been consistent for the past twelve months.
About the Human Capital Index (HCI)
The TriNet Human Capital Index draws on real-time employment information from about 3,000 small companies who employ between 10-200 employees. These companies fall primarily into three broad industry segments: technology, professional services and financial services. The HCI aggregates and reports data reflecting hiring and involuntary terminations not related to performance (layoffs). The HCI is reported monthly, using current payroll and HR data compiled as of the 24th of each month. Additional details can be found on the company’s HCI web page.
TriNet is a trusted partner to small businesses, providing critical HR-related services on an outsourced basis. TriNet’s solutions help contain costs, minimize employer-related risks and relieve administrative burden to keep an entrepreneur’s focus on core business functions. From routine employee benefits service and payroll processing to high-level human capital consulting, TriNet’s PEO expertise is integrated with every facet of a client’s business. TriNet specializes in serving fast-moving companies in fields such as technology and professional services, who recognize that top-quality employees are the most critical competitive asset. For more information, please visit http://www.trinet.com.
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