Small Businesses Hiring at Lowest Level in Nine Months
TriNet’s Human Capital Index aligns with current debate about double-dip recession, as no signs of accelerated hiring appear for small businesses.
SAN LEANDRO, Calif. (July 8, 2010) – Small business hiring stalled in June at the lowest level seen in the past nine months, according to TriNet’s Human Capital Index, supporting the growing debate about whether our economy is entering a double-dip recession. Despite HCI data that showed small business owners reduced involuntary layoffs last month, the hiring picture remains bleak, aligning with figures released last week by the Labor Department that showed initial jobless claims increased by 13,000.
“Small businesses are not seeing enough growth to justify adding new, full-time positions, so they are keeping their current employees and waiting for signs of an economic upturn,” said John J. Midgley, TriNet’s vice president of products. “June marks the lowest hiring reading in the Index since we started tracking data last September. The fact that last month also marks the Index’s lowest layoff reading suggests that small business owners are focused on productivity improvements rather than growth.”
Small businesses continue to show reluctance to hire new full-time employees in June, as the hiring index fell to 87, well below a high reading of 101 in February, and further behind the broader U.S. professional and business services sector measurement of 108, which was flat through the second quarter. Values below 100 indicate a slower rate of hiring compared to the base month of September 2009.
Looking at layoffs, the pace is also at its lowest point in the Index’s history, dropping 8 points last month to 72. Fewer layoffs suggest that management teams are efficiently utilizing their human capital increasing levels of productivity.
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 second-largest 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.
“The TriNet Hiring and Layoff indexes produce a snapshot that is otherwise not tracked in the broader economy,” Midgley added. “Small companies represent 99.7 percent of all employer firms; they employ half of all private sector employees and pay 45 percent of total U.S. private payroll. 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). These are the types of companies we track in the TriNet Human Capital Index.”
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 serves as a trusted HR partner to small businesses, to help contain costs, minimize employer-related risks, relieve administrative burden, and keep 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 organization. Its solutions specialize 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 https://www.trinet.com.
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