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TriNet's Human Capital Index Reveals SMBs Hire Fewer, Layoff More in March

Newly launched HCI highlights monthly hiring, involuntary terminations and compensation trends for small businesses

SAN LEANDRO, Calif. (March 31, 2010) – TriNet, the country’s largest private provider of human resources outsourcing solutions to small businesses, today released its Human Capital Index (HCI), the first indicator of the real-time employment and compensation practices of thousands of small technology, professional services and financial services companies. The March HCI reveals that hiring slowed while layoffs ticked upward as entrepreneurs and business owners contemplate signs about the economy’s growth before making new hires.

The Hiring Index is at 93, a decrease from February’s 101 reading. Additionally, small businesses hired at a slower pace than larger counterparts, who saw a 105 HCI reading for March.

“Small companies are hiring at a more measured pace compared to the past few months. Layoffs increased slightly in March, but remain less frequent than Q4 ’09. Net employment growth appeared flat in March, which may indicate that companies are waiting for signals about the broader business climate,” said John J. Midgley, TriNet’s VP of products. “While U.S. private-sector service employment has been relatively flat since last fall, we had seen an increasing percentage of companies adding net new positions. This pattern, developing since the beginning of the year, may be flattening out.”

Comprised of real-time data from close to 3,000 companies, the HCI will be issued monthly to provide visibility into the employment and compensation practices of small technology, professional services and financial services companies, ranging from 10-200 employees earning on average $75,000 in annual salary.

Small Companies Hiring More Conservatively

While employment has picked up slightly in the broader economy, TriNet’s analysis of smaller companies shows that the rate of hiring has been below that of the professional and business services sector since December. After a pickup in hiring during the fourth quarter, the study population reduced hiring in March to the lowest levels seen since last September. The TriNet Hiring Index was at 93 in March, showing a decline since February and remaining below the broader U.S. hiring trend.

Layoffs Ticked Up Slightly

The pace of small-company layoffs increased slightly, but remains well below 2009 and below the layoff rate in the broader economy. The termination rate in the study population was 1.1 percent in March, compared with 4.3 percent in the broader U.S. professional and business services sector. This general pattern has been in place for at least the past six months. TriNet’s Layoff Index stood at 83 in March, up 3 points over February.

Percentage of Companies Showing Net Employment Growth Flat In March

One measure of small-employer confidence is willingness to support net new jobs, and while this measure shows improvement since last fall, current data shows net employment growth has stalled. In March, the trend rate of companies showing net growth in employment remained at a six-month high of 27 percent, even as total private sector service employment in the broader economy remained flat. TriNet’s Growth Index remains at 103 for March.

About TriNet

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

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