While some companies have slowed their hiring pace amid fears of an economic slowdown, demand from small businesses for latest hires has yet to point out signs of declining, Paychex CEO Marty Mucci said.
“We still don’t see any strong recession measures here for small businesses,” Mucci told CNBC’s “Squawk Box” on Tuesday.
Employment at US small businesses with fewer than 50 employees has fallen for five months in a row, in accordance with data from Paychex and IHS Markitbut Mucci said it had more to do with a scarcity of applicants than a mirrored image of small business pullouts.
“The hardest thing for small businesses is that they’ve demand and wish workers – they simply have slightly harder time finding it,” he said.
This is contrary to what happens in some larger companies. In August, private payroll rose by 132,000, down from the 268,000 increase recorded in July, in accordance with ADP’s monthly payroll report.
ADP’s chief economist Nela Richardson told CNBC that the info “suggest a shift towards a more conservative hiring pace, perhaps as companies attempt to decipher the conflicting signals coming from the economy.”
“We could also be at a turning point, from super-charged gains to something more normal,” she added.
But ADP data showed that while companies with 500 or more employees grew by 54,000 and medium-sized companies added 53,000, those with fewer than 50 employees saw a rise of 25,000.
A “Now Hiring” sign is displayed at a Panda Express restaurant on August 5, 2022 in Marin City, California.
Justin Sullivan | Getty’s paintings
Mucci said there are small businesses that are feeling “wage inflationary pressure”.
Average hourly earnings were $30.71 in August, up $1.51 from the identical month last 12 months, in accordance with Paychex. Hourly earnings increased by 5.18% over the month, matching the record set in May 2011.
The difficulty of each finding workers and having to pay higher wages may lead to an additional slowdown in employment, Mucci said, adding that “each of this stuff are slowing down [hiring] down a bit.”
Fifty percent of small business owners said it was harder to rent within the third quarter of 2022 than it was a 12 months ago. CNBC/SurveyMonkey Small Business Survey, while 28% say they’ve vacancies they’ve not been capable of fill for at the least three months. While these numbers are relatively unchanged from previous quarters, they highlight the hiring difficulties faced by many small business owners.
There were 11.24 million job openings in July, with vacancies outstripping available workers by almost a 2 to 1 margin, in accordance with the study of job vacancies and worker turnover.
Friday’s August non-farm payrolls data released by the Bureau of Labor Statistics is anticipated to strengthen the view that demand for employment stays high.
This workforce crisis has forced many small businesses to chop their hours or close on certain days, Mucci said. However, he noted that there are a record variety of workers with at the least two jobs in accordance with federal labor records. There were 433,000 full-time employees in July, up from 401,000 in July 2021, in accordance with data from the US Bureau of Labor Statistics.
“Many people are looking for a second job and hopefully small businesses will likely be a positive takeaway,” he said.