Paychex has officially published the results from its latest report named Paychex Small Business Employment Watch, which revealed that job growth in U.S. small businesses, with fewer than 50 employees, showcased modest employment growth throughout 2024.
Going by the available details, the national jobs index was relatively unchanged (0.02 percentage points) at the close of the year in December and has held its pace since the summer.
Talk about the given report on a slightly deeper level, we begin from how the national small business jobs index averaged 100.22 in 2024, representing modest employment growth. Having said so, it would markedly slow down by 1.32 percentage points from 101.21 in December 2023 to 99.89 in December 2024.
Next up, Paychex’s report discovered that Midwest (100.20) remained the top region for small business employment growth for the seventh consecutive month during December. Here, it was Wisconsin (100.77) that actually led the charge and ranked second among all states for job growth during December. This was also the state’s best rank since March 2020.
Moving on, for the second month in a row, Dallas (101.73) and Houston (101.16) would rank first and second, respectively, among metros for job growth in December.
“The pace of job growth among U.S. small businesses down-shifted slightly as 2024 progressed, yet small businesses remained resilient throughout the year,” said John Gibson, Paychex president and CEO. “As we head into 2025, small business owners continue to face some challenges such as access to growth capital, rising healthcare costs, and ability to hire qualified talent. In spite of this, optimism and hiring intentions improved to close the year – both trends that will be worth watching as we begin 2025.”
Another detail worth a mention here is rooted in the surveyed areas three-month annualized hourly earnings that witnessed a growth of more than three percent for the first month since April.
Hold on, we still have a few bits left to unpack, considering we still haven’t touched on how weekly earnings growth (2.54%) slowed to a four-year low in December. On top of that, weekly hours worked growth (-0.43%) remained negative year-over-year for the 21st consecutive month. In fact, it would end up hitting its lowest level since July 2022.
Rounding up highlights would be the continued evolution of workforce composition, something which is largely caused by recent hurricanes. Accommodating the given change, Tampa (4.56%) topped the metro rankings for hourly earnings growth for the second month in a row.
As for Paychex Small Business Employment Watch, released on a monthly basis, the report basically focuses on businesses with fewer than 50 workers. By doing so, it puts together a comprehensive analysis of national employment and wage trends, and at the same time, examines regional, state, metro, and industry sector activity.
More on the same would reveal how this report is based upon payroll data of approximately 350,000 Paychex clients. The job index is scaled to 100, which represents no year-over-year change in job growth among same store businesses. You see, index values above 100 represent new jobs being added, whereas on the other hand, values below 100 represent jobs being lost.
Founded in 1971, Paychex’s rise up the ranks stems from delivering a full suite of technology and advisory services in human resources, employee benefit solutions, insurance, and payroll. The company’s excellence in what does can also be understood once you consider it currently serves well over 745,000 customers in the U.S. and Europe, as well as pays one out of every 12 American private sector employees.
“As we have done for more than 50 years, Paychex will continue to focus our efforts in the coming year on designing solutions to support the small business growth that ultimately fuels our broader economy,” said Gibson. “Our PEO (professional employer organization) and Paychex Insurance Agency have long offered companies the opportunity to save on healthcare costs. Other solutions we introduced in 2024 were designed to address evolving business challenges, such as Paychex Flex Perks®, Paychex Recruiting Copilot, HR Analytics with AI Insights, Paychex Funding Solutions, and Paychex Flex® Engage.”
