Small Business Layoffs Dropped 28 Percent in August
TriNet’s data shows small business owners are holding on to talent and stabilizing workforce.
SAN LEANDRO, Calif. (Sept. 29, 2010) – Small business owners are slowing down the pace of employee layoffs, continuing a downward trend in August with an unprecedented 27.9 percent decline over July’s figures. This indicates that employers have slowed the recent trend of layoffs as they prepare for the second half of 2010 amid indications of a weak overall economic environment and pessimistic expectations for the next few months of the year. This insight is provided by TriNet’s Human Capital Index (HCI), which also showed that these same small business owners are slowing down their hiring as well, an 8.75 percent decrease in August after a slight increase in July. TriNet’s data indicates somewhat of a stabilization of the workforce within the small business community with the simultaneous slowdown in both recruiting and termination of employees.
Layoffs reached their lowest point in the one-year history of the HCI, registering a 12-point drop from July’s reading. Small business owners are hesitant to expand, as the hiring index confirms, but they’re also resisting retraction in unmatched levels, as compared to the overall U.S. economy, where layoffs have been on the rise.
“Our figures reflect a continued cautious outlook by small business owners as they prepare for uncertain economic conditions in the second half of the year,” said Jimmy Franzone, TriNet’s vice president of corporate development.
The HCI also indicates that hiring levels in small businesses decreased 7 points (8.75 percent) in August to a monthly reading of 80, while the broader U.S. private sector grew by 3.54 percent month over month.
The HCI is a monthly report that provides direct visibility into the employment practices of thousands of small technology, professional services and financial services companies. TriNet, the country’s largest independent provider of human resources outsourcing solutions to small businesses, developed the HCI with real-time data from 3,000 companies ranging from 10-200 employees earning an average annual salary of $75,000.
These hiring and layoff indexes produce a snapshot that is otherwise not tracked in the broader economy. Small businesses represent 99.7 percent of all employer firms, employ half of all private sector employees and pay 45 percent of total U.S. private payroll. In addition, they produce 14 times more patents per employee than large firms and are employers of 41 percent of high-tech workers (such as scientists, engineers, computer workers).
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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