August hiring finds its footing for small businesses
After a softer start to the summer, small business hiring picked up in August. The CBIZ Small Business Employment Index (SBEI) rose 0.66% on a seasonally adjusted basis, a turn upward following declines in June and July. Because the index tracks payroll and headcount at more than 2,900 companies with 300 or fewer employees, it offers a broad, practical read on how smaller employers across many sectors are navigating the labor market.
What shifted in August employment
Government and private reports told a mixed story. The Bureau of Labor Statistics reported 142,000 private-sector jobs added in August, a gain that fell short of expectations. The unemployment rate inched down to 4.2% and covers nonfarm private employers of all sizes. Meanwhile, ADP’s separate report showed most of August’s job growth concentrated at medium and large companies, with an increase of 99,000 jobs. Small businesses, by contrast, posted a modest month-over-month decline of 9,000 jobs on a seasonally adjusted basis. Together, these figures point to uneven hiring momentum depending on company size.
What experts are seeing
Anna Rathbun, CFA and Chief Investment Officer at CBIZ Investment Advisory Services, described a labor market that’s cooling. The Job Openings and Labor Turnover Survey (JOLTS) showed openings dropping to their lowest level since early 2021. She also noted that both the ADP and BLS readings came in below expectations, reinforcing a more cautious view of the labor market’s gradual retreat from post?pandemic highs.
Where hiring rose—and where it slipped
Hiring gains weren’t uniform across the country. The Southeast led with a 1.07% increase, closely followed by the Central region at 1.04%. The Northeast moved higher as well, though more modestly, at 0.16%. The West went the other direction, with hiring down 0.79%, underscoring an uneven recovery that varies by region.
Industries moving up and down
Several sectors posted solid gains in August, including Educational Services, Technology and Life Sciences, and Transportation. On the other hand, Accommodation and Food Services, Agriculture, Forestry, Fishing and Hunting, and Insurance saw the steepest declines. The split highlights a patchwork of demand, where some employers are adding roles while others continue to pull back.
What August may mean for the months ahead
Despite the choppy backdrop, Rathbun pointed to a welcome breadth of employment gains in August. Still, with multiple indicators flagging potential hurdles, it’s not yet clear how durable this progress will be. One notable shift: employers appear to be holding on to their teams. Retention has climbed to 61%, up from a pre?pandemic average of 51%. That higher retention suggests small businesses are working harder to keep the talent they have, even as they face ongoing challenges attracting skilled workers.
A cautious steadiness in hiring
As of August, small business hiring shows resilience—a needed change after declines earlier in the summer. The final quarter of the year will be telling: momentum could carry through, or a slowdown could reassert itself as broader economic conditions evolve. How employers manage staffing—balancing new hires with retention—may determine whether recent gains hold or fade.
Frequently Asked Questions
What is the CBIZ Small Business Employment Index?
The CBIZ SBEI tracks hiring and payroll trends at more than 2,900 companies with 300 or fewer employees. It’s designed to provide a clear snapshot of how small businesses are adjusting headcount each month across a range of industries.
How did small businesses perform in August hiring?
The SBEI rose 0.66% in August, signaling improving conditions for small employers. At the same time, ADP data showed small businesses shed about 9,000 jobs month over month on a seasonally adjusted basis, illustrating how readings can differ by data source.
Which regions saw the most hiring growth?
The Southeast posted the strongest gains at 1.07%, followed by the Central region at 1.04%. The Northeast also rose, up 0.16%, while the West declined 0.79%.
What industries are growing in terms of hiring?
Educational Services, Technology and Life Sciences, and Transportation recorded notable increases in August. By contrast, Accommodation and Food Services; Agriculture, Forestry, Fishing and Hunting; and Insurance experienced the largest pullbacks.
What does the future hold for small business employment?
The outlook is cautious. August brought broader gains, but several indicators point to possible challenges ahead. Employers are retaining more workers—61% versus a pre?pandemic average of 51%—which may support stability even if hiring slows.
