Spending Pullback May Worsen as Job Openings Decline

Nearly 40% of businesses regularly host open discussions and listen to employee feedback on diversity and inclusivity matters. Wizehire’s findings highlight the most effective recruitment practices for small businesses. Employee referrals were the top recruitment method for nearly half (49%) of businesses, closely followed by job boards  (45%) and business career pages (44%). When onboarding new hires, 44% of businesses leverage a dedicated HR department, and 27% have at least one dedicated HR staff member.

The thinning of the ranks in the retail sector indicates that merchants are girding for a continued pullback in demand into spring and possibly summer. Forty-three percent of respondents to the SHRM survey said that they use AI to support HR work, with the majority using the technology for recruiting. More specifically, they use AI tools to generate job descriptions, review or screen applicant resumes, and automate candidate searches. Nearly 90% of those who do use an AI tool say it saves them time and/or increases their efficiency.

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Disposable personal income, which accounts for personal income after taxes, increased by $191.6 billion, or 0.9%, according to government data released last week. The personal saving rate, measured as a share of disposable personal income increased to 4.6% in February, reaching $1.02 trillion. We’re well above the 3.3% saving rate that was notched in December. The skills reported to be in the highest demand are basic skills (58%), followed by more complex skills (36%), social skills (36%), and technical skills (28%). Construction faced notable hiring challenges, with job openings down 13 points from November and 17 points from December 2023. This sector, along with transportation and manufacturing, continues to report difficulty finding skilled workers.

46% of small business owners expect to create new jobs in 2025, while 37% expect to maintain the same number of jobs. 69% of small businesses are optimistic about the financial trajectory of their business in 2025, and 78% have plans to grow their business this year. Small businesses appear to be ending 2024 on a good note; we highlight four themes to watch as we head into the new year. Airlines had already started telling investors last month that travel demand is slowing, so the ripple effect on the leisure industry may be pronounced into peak traveling season. Join SHRM for unlimited access to exclusive articles and tools.

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Other challenges small businesses face are the need for more qualified candidates (29%) and the waste of resources from candidate ghosting (24%). These issues add unexpected complexity to the hiring process, possibly slowing business growth. HOUSTON, May 16, 2024 /PRNewswire/ — Wizehire, an end-to-end hiring solution for growing small and small business hiring trends end the year on a positive note medium-sized businesses (SMBs), recently released its 2024 Small Business Report. The study surveyed 1,000 small business owners and operators, ranging from 10 to 200 employees. This research provides insights into hiring challenges, business growth, and people management in the evolving landscape of small businesses in 2024.

• We’re well above the 3.3% saving rate that was notched in December.
• The study also revealed that a significant majority of small businesses, 88%, prioritize building inclusive company cultures and valuing diversity, equity, and inclusion.
• Individuals and households are cognizant of the macroeconomic volatility that’s out there and are less inclined to move out of their present roles — even if the state of those roles may be uncertain.
• CBIZ provides its clients with financial services including accounting, tax, financial advisory, government health care consulting, risk advisory, real estate consulting and valuation services.

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On the upside, 28% shared they have a good employee retention track record. Thirty-six percent of businesses were generally satisfied with the quality of their job candidates, but 30% acknowledged that finding suitable applicants was time-consuming. Moreover, 22% believe there’s room for improvement regarding talent quality, highlighting the need for more strategic approaches in recruitment.

That’s down from 77% last year and steeply down from a high of 91% in 2022. Although some industries increased hiring, growth did not occuracross the board. Hiring climbed in Healthcare, Financial Services,Real Estate, Non-Profits and Retail Trade, yet decreased inTechnology and Life Sciences, Transportation, and Accommodation andFood Services.

While the small business sector has grappled with another surge in COVID-19 cases, analysts are looking toward consumer sentiment and optimism stemming from vaccine efforts to reinforce economic recovery in 2021. The CBIZ SBEI tracks payroll and hiring trends for over 3,500 companies that have 300 or fewer employees, providing broad insight into small business trends. 8, The CBIZ Small Business Employment Index (“SBEI”) reported growth in December, closing out 2020 with a seasonally adjusted increase of 0.32%. Moving past the holiday shopping season,consumer sentiment remains key, and the COVID-19 vaccination ratewill likely help determine small business hiring trends in2021.

• Looking ahead, NFIB noted that small business owners are optimistic about 2025 policy changes but remain cautious as they await clarity on congressional and administrative agendas.
• 60% of small businesses are currently using artificial intelligence (AI).
• Views and estimates constitute our judgment as of the date of these materials and are subject to change without notice.
• Wizehire’s findings highlight the most effective recruitment practices for small businesses.
• SHRM surveyed over 2,000 HR professionals earlier this year, and 69% reported difficulty recruiting for their full-time positions over the last 12 months.

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“TA leaders know they can attract better talent and have more sourcing options if they are able to offer remote work. Candidates still prioritize flexibility, but they realize there is less access to it than before. Flexibility when you work tends to be more important than flexibility in where you work,” she said. But certainly, the access to talent would be unconstrained if recruiters offered flexible work, he said.

The NFIB Jobs Report, based on responses from 513 small business owners, provides insight into the hiring and labor trends shaping Main Street businesses at the close of the year. The report also highlighted that 28% of business owners reported few qualified applicants, while 21% reported none at all—a two-point increase in the latter category. Small Business Checkpoint is a regular publication from Bank of America Institute. It aims to provide a real-time assessment of small business spending activities and financial well-being, leveraging the depth and breadth of Bank of America’s proprietary data.

CBIZ Employee Services Organization is a division of CBIZBenefits & Insurance Services, Inc. The CBIZ Small Business Employment Index (“SBEI”) reportedgrowth in December, closing out 2020 with a seasonally adjustedincrease of 0.32%. While the small business sector has grappledwith another surge in COVID-19 cases, analysts are looking towardconsumer sentiment and optimism stemming from vaccine efforts toreinforce economic recovery in 2021. The CBIZ SBEI tracks payrolland hiring trends for over 3,500 companies that have 300 or feweremployees, providing broad insight into small business trends. The CBIZ Small Business Employment Index (“SBEI”) reported growth in December, closing out 2020 with a seasonally adjusted increase of 0.32%.

Although small businesses plan to hire, many face challenges with stability and growth due to inflation on spending and market competition. Thirty percent expressed uncertainty about the economy and consumer spending, and 41% felt pressure from increasing market competition. 44% of small businesses are currently hiring full-time or part-time employees, but 89% of small businesses hiring are finding it difficult to recruit qualified employees. The smallest firms that line the Main Street economy are holding steady, but they do not seem to be in expansion mode.

The views in these materials may differ from the views and opinions expressed by the BofA Global Research department or other departments or divisions of Bank of America. Information has been obtained from sources believed to be reliable, but Bank of America does not warrant its completeness or accuracy. These materials do not make any claim regarding the sustainability of any product or service. Views and estimates constitute our judgment as of the date of these materials and are subject to change without notice.