Dive Brief:
- A new Paychex study shows that despite falling rates of hiring in the small business sector, employees still got pay raises in May, CNBC reports. Small business employment growth is down 0.25% from 2016, the weakest three-month rate since 2009.
- Martin Mucci, Paychex president and CEO told CNBC that this can be attributed to the 'wait and see' approach many small businesses are taking since the presidential election. Despite a drop in hiring, salaries are healthy and raises are still on the table — with increases of 2.87% reported compared to May 2016.
- Dallas is reportedly the best city for small business growth, followed closely by Atlanta. Tennessee offered the highest number of new small businesses.
Dive Insight:
In the midst of President Donald Trump's 'Hire American' order, healthcare reform and reduction in funds for many state programs, it's understandable that many businesses are cautious about adding new employees. However, the Paychex data suggests that small businesses are and will continue to be at the forefront of new job creation.
Data from the U.S. Small Business Administration (SBA) shows that small businesses have created 66% of all net new jobs since the 1970s, and account for more than half of all jobs in America. These businesses also tend to be more in touch with employees because small businesses invest everything into planned growth.
Small businesses are competing for talent against larger firms, so offering generous salaries and regular raises is one of their best strategies to attract and retain the best employees.
