The job market is notoriously volatile, especially for small businesses. One survey states we’ve had the highest increase in employment since 2009. Another says we’re bearish on hiring in 2020. Who is right? How is it going to impact me if I plan to hire? Will the job market still be as tight throughout the year?
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The Job Market Data
There are several indices which monitor small business. Some are surveys, which capture the sentiment. Some are based on actual reported data. Some are lagging (meaning after the fact). Some are leading (before the fact).
Gallup measures owners’ present and future optimism over the next 12 months. In this sense, it is a leading indicator based on perception and sentiment. In this study, small business owners were more bearish on hiring in 2020. This may be due in part to the strong hiring that’s occurred to date. However, it could also be an indicator of uncertainty. Sentiment and fact are two different things.
CBIZ Small Business Employment Index (“SBEI”)
This index tracks actual payroll and hiring for over 3,500 companies with fewer than 300 employees. They just reported the highest uptick in January since it began in 2009. January typically tips as holiday seasonal workers exit. This wasn’t the case this year.
ADP & Moody’s
These indices look at the job market as a whole. They both showed increases in private-sector jobs in January. While their definitions of ‘small’ are different, they all showed the same thing that actual numbers in January are somewhat conflicting to Gallup’s results.
Ok, Great! So, What Does This Mean for Me?
It means two things. First, the job market in the first quarter is likely to remain tight. Why?
“The current economic outlook indicates strong potential for continued growth, especially if the winter remains mild.” (Financial Buzz)
Even if COVID-19 (Coronavirus) slows things down a bit, we believe that it will be temporary and transient. We provide several ways to deal with a cooling market in some posts, and we also talk about what to do when optimism is high. All of that said, be prepared to take calculated risks.
Second, it suggests that these pressures might ease as we enter the second quarter and the back half of the year, especially if the Fed reverses its rate cut once the Coronavirus threat has passed.
When it comes to hiring, you never want to play it too safe. This is the most important thing to know. If you fit those criteria, you should probably still plan to hire in the first quarter. If you don’t and can wait, the second quarter and the back half of the year may be a better hiring environment. Either way, prepare for a shifting market.
At ProStrategix, we know you have concerns. We’re designed to help give you the business support you need so you can focus on doing what you love. If you would like to learn about how we might be able to help you, please contact us.