Small businesses are still struggling to find new workers, despite the lack of recessionary measures affecting them, according to Paychex CEO Marty Mucci. While larger companies have slowed down their pace of hiring, small businesses have a harder time finding workers, which is why hiring at U.S. small businesses with fewer than 50 employees has slowed for five straight months, according to data from Paychex and IHS Markit. Mucci said that the demand for workers from small businesses has not shown any signs of declining, but they are struggling to find the workers they need.
On the other hand, larger companies are shifting toward a more conservative pace of hiring, according to ADP’s monthly payroll report. The private payrolls report showed that private payrolls grew by 132,000 in August, down from the 268,000 gain seen in July. ADP chief economist Nela Richardson said that this data “suggests a shift toward a more conservative pace of hiring, possibly as companies try to decipher the economy’s conflicting signals.”
Despite the lack of recessionary measures, small businesses still face a tough time finding workers. This is because they have the demand for workers, but they have a harder time finding them. The data from Paychex and IHS Markit suggests that small businesses are not pulling back, but rather, they are struggling to fill the positions they have.
Impact of having to pay higher wages
While some companies have slowed the pace of hiring due to concerns about an economic slowdown, the demand from small businesses for new workers has not yet shown signs of declining, Paychex CEO Marty Mucci said. “We’re still not really seeing any strong recessionary measures here for small business,” Mucci said on CNBC’s “Squawk Box” on Tuesday.
Hiring at U.S. small businesses with fewer than 50 employees has slowed for five straight months, according to data from Paychex and IHS Markit, but Mucci said that has more to do with a lack of applicants than a reflection of small businesses pulling back. “For small businesses, the toughest thing is they have the demand, and they have the need for workers — they just have a little bit harder time finding it,” he said.
That is counter to what is happening at some larger companies. In August, private payrolls grew by 132,000, a drop from the 268,000 gain seen in July, according to ADP’s monthly payroll report. ADP chief economist Nela Richardson told CNBC that the data “suggests a shift toward a more conservative pace of hiring, possibly as companies try to decipher the economy’s conflicting signals.”
“We could be at an inflection point, from super-charged job gains to something more normal,” she added. But the ADP data showed that while companies with 500 or more employees grew by 54,000 and medium-sized businesses added 53,000, those with fewer than 50 employees saw a 25,000 gain.”
