For small businesses looking to attract talent, a recent April 2019 hiring forecast shows that job growth was essentially unchanged last month, while hourly earnings growth for workers continues to slightly grow.
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The Paychex | IHS Markit Small Business Employment Watch for April shows job and wage growth kept pace with recent months. In the first 4 months of 2019 job growth has remained relatively consistent, slowing just 0.03% per month to 98.77 in April. Annualized hourly earnings growth in the last quarter was 2.78%, higher than April’s rate of 2.50% ($0.66).
“While weak, the rate of small business hiring has been consistent, with the national index slightly below 99 for the fifth consecutive month,” says James Diffley, Chief Regional Economist at IHS Markit—in a press release announcing the forecast.
Experts Weigh in
“We’re encouraged to see the rate of small business job growth holding steady, but finding qualified candidates remains a significant challenge for small businesses,” says Martin Mucci, Paychex President and CEO. “According to a recent survey we conducted, to help address the labor skills gap, a majority of small business leaders say they’re willing to consider hiring underqualified candidates who could then be trained on the job.”
Irina Novoselsky—CEO of CareerBuilder—advises small- to medium-sized businesses (SMBs) to think outside the box. “Lean organizations can get a leg up by embracing unconventional thinking and cutting-edge practices,” she says. “Take advantage of job listings that use location-based technology and augmented reality to help employers deliver on candidates’ top desires, like shorter commutes and more money.”
Novoselsky also advises SMBs to reconsider past applicants, who initially lacked the right skills but who may now be a good fit. “Many businesses overlook talent pools they’ve already created in favor of reaching brand new candidates. A cost-effective and even faster path to hiring great talent is reaching out to people who’ve already expressed interest in your brand, who may have since acquired new skills,” she says.
Additional Findings
Broken down further by geography and industry, the April report showed:
- The South continues to lead regions in employment growth; the West remains the top region for hourly earnings growth exceeding 3%.
- Texas remains the strongest state for small business job growth; Missouri took first place among states for wage growth.
- Dallas is again the top metro for job growth; San Diego continues to lead metros for wage growth.
- Education and Health Services has increased its pace of small business employment growth in each month of 2019.
National Jobs Index
- At 98.77, the national index was essentially unchanged from the previous month (-0.02%) and is down 0.77% from last year.
- Small business employment growth has held pace throughout the first 4 months of 2019, slowing just 0.03% per month.
National Wage Report
- Hourly earnings growth continues to moderate slightly, now at 2.50%. However, the last quarter has shown 2.78% annualized growth.
- 1-month and 3-month annualized growth rates for weekly earnings are above 3% for the first time in more than a year.
Regional Jobs Index
- With Texas, Tennessee, and Georgia among the top five states, the South leads all regions in small business employment growth (99.60).
- Though the Northeast continues to trend below other regions, the Northeast had its first positive month in more than a year, gaining 0.08%.
Regional Wage Report
- Hourly earnings growth in the West has exceeded 3% since 2015, while the other regions remain below 2.50%.
- Due to increases in weekly hours worked, weekly earnings growth in the Northeast (2.51%) outpaces the West (2.41%).
- At 2.45% in April, weekly earnings growth has quickly improved in the South during 2019.
State Jobs Index
- Improving to 97.81, Massachusetts gained 0.39% from the previous month, its best 1-month result since 2015.
- After increasing 0.61% during the first quarter of 2019, Arizona lost its momentum, slowing 0.52% in April.
Note: Analysis is provided for the 20 largest states based on U.S. population.
State Wage Report
- Missouri, California, New York, and Arizona are the only states above 3% in hourly earnings growth in April.
- Wage growth in Arizona has been decelerating since the beginning of 2018.
Note: Analysis is provided for the 20 largest states based on U.S. population.
Metropolitan Jobs Index
- Seattle surged to third-ranked metro for small business employment growth, behind Dallas and Tampa, with an index slightly below 101 and a positive 12-month growth rate.
- Slowing to 100.35, Phoenix suffered the largest 1-month decline among metros, down 0.58%.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Metropolitan Wage Report
- San Diego and Riverside lead metros with annual hourly earnings gains above 4%.
- San Diego has a 3-month annualized growth rate near 6%.
- Houston and Tampa trail metros with less than one and a half percent hourly earnings growth from a year ago.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Industry Jobs Index
- With its best 1 month gain in nearly 3 years, the index for Construction surpassed 100, up 0.31% from the previous month.
- Education and Health Services has increased its pace of small business employment growth in each month of 2019 and has a positive 12-month growth rate for the first time in more than 2 years.
Note: Analysis is provided for seven major industry sectors.
Industry Wage Report
- Leisure and Hospitality has lead industry sectors in hourly earnings growth since the beginning of 2018 and is accelerating in 2019, with 4.46% growth in April.
- Manufacturing; Trade, Transportation, and Utilities; and Construction are also above 3% hourly earnings growth in April.
Note: Analysis is provided for seven major industry sectors.