Small and midsize firms remain eager to expand their workforces, but economists say many jobseekers are likely chasing higher pay at larger companies with deeper coffers.<\/p>\n
The U.S. economy added 303,000 jobs last month, far more than anticipated, the Bureau of Labor Statistics reported Friday. That blowout report came days after private payroll processor ADP likewise found more March jobs gains than expected. But the race to staff up may be a tough one for many small employers right now.<\/p>\n
\u201cThe challenge, especially for the smallest businesses, is that this is a competitive labor market still,\u201d ADP Chief Economist Nela Richardson said during a conference call Wednesday.<\/p>\n
While 2024 kicked off with a spate of high-profile layoffs and it\u2019s taking longer for many jobseekers to land gigs, persistently strong labor demand means that for many employers, \u201cit\u2019s easier<\/em> to hire, but it\u2019s not easy<\/em> to hire,\u201d Richardson said.<\/p>\n While a separate BLS report found Tuesday that employers with fewer than 1,000 workers\u00a0posted the lion\u2019s share of job openings\u00a0in February, filling those positions is a different matter. ADP said that smaller companies \u2014 those with workforces ranging from 20 to 49 \u2014 shed 11,000 roles last month, the only subset of employers to do so.<\/p>\n It\u2019s easier to hire, but it\u2019s not easy to hire.<\/p>\n ADP Chief Economist Nela Richardson<\/span><\/p>\n<\/div>\n The ability to offer competitive pay may be a factor. Average hourly earnings were up 4.1% in March from the year before, the BLS said Friday. That pace still outruns inflation, which clocked in at 3.2% in February, but has been cooling down for months.<\/p>\n Not all small businesses are scaling back hiring; the tiniest, with 19 or fewer workers, added 27,000 positions last month, ADP found. But Richardson speculated that the drop in some smaller businesses\u2019 hiring could reflect jobseekers following the dollars in an economy where big raises may not be as easy to come by everywhere.<\/p>\n \u201cWorkers maybe shifted to larger firms where they could potentially make more money,\u201d she said. <\/p>\n ADP found private-sector workers are still netting healthy average raises. Those who changed jobs from February to March saw their wages jump 10% since the same period last year, while those who stayed put got paid 5.1% more.<\/p>\n The steepest pay gains last month, though, were among firms with 20 to 499 employees. That could indicate many small and midsize companies are pushing to lure hires in a tight market \u2014 and possibly trying to close the gap with bigger rivals.<\/p>\n Small businesses have played an outsize role in the increase in job vacancies over the last three years, Tuan Nguyen, U.S. economist at financial services firm RSM, said Thursday. Many, however, are \u201cconstrained by their limited resources\u201d and still \u201cface prolonged challenges in recruiting qualified candidates,\u201d he said.<\/p>\n They\u2019ve been competing for talent amid a post-pandemic startup boom that has helped juice the broader demand for labor, contributing to shortages in some sectors that still haven\u2019t been erased. New business formations in 2023 averaged nearly 500,000 each month, a sharp jump from the 300,000 monthly average just four years prior, Nguyen said.<\/p>\n A climate of high interest rates \u201cfurther exacerbates the challenges for small businesses,\u201d which often face higher borrowing costs than larger companies, he added.<\/p>\n Federal Reserve Chairman Jerome Powell reiterated Wednesday that the central bank likely remains on track to lower interest rates \u201cat some point this year,\u201d an expectation Wall Street investors widely share. But Powell emphasized, as he has for months, that he\u2019d need to see more evidence of inflation trending down toward the Fed\u2019s 2% target.<\/p>\n \u201cFederal Reserve officials can remain confident that they\u2019re satisfying the maximum employment component of their dual mandate,\u201d Bankrate Senior Economic Analyst Mark Hamrick said in a statement after Friday\u2019s jobs report, referring to the central bank\u2019s two-part mission of keeping prices stable and employment high.<\/p>\n With unemployment ticking down slightly to 3.8%, hiring accelerating and wage gains cooling, many analysts remain optimistic that the economy can continue growing without inflation flaring back up.<\/p>\n \u201cThe economy continues to display remarkable resilience,\u201d Hamrick said.<\/p>\n<\/p>\n Small and midsize firms remain eager to expand their workforces, but economists say many jobseekers are likely chasing higher pay at larger companies with deeper coffers. The U.S. economy added 303,000 jobs last month, far more than anticipated, the Bureau of Labor Statistics reported Friday. That blowout report came days after private payroll processor ADP […]<\/p>\n","protected":false},"author":0,"featured_media":2899,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-2898","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/2898","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=2898"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/2898\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/2899"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=2898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=2898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=2898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}