Small Businesses Go Big With Hiring

Small businesses have seen higher growth in new postings in recent months than big businesses have.

At the same time, small businesses have been struggling to hire new employees, as shown by long filling times and low filling rates for job postings.

Tech startups put out disproportionately more postings than Big Tech, perhaps in an effort to recruit laid off talent.

Small businesses are the backbone of the US economy. According to Census data, small businesses with less than 250 employees made up 58% of the annual payroll in 2020. In a turbulent economy marked by high inflation and mass layoffs, how do small businesses fare when it comes to hiring? We recently talked to?Bloomberg?about our findings.

Small businesses’ labor demand remained strong in the recent months and the number of new job postings grew at a consistently higher rate than big businesses. Even as the economy started to cool down in the second half of 2022, small businesses have continued to increase their number of new job postings at a greater rate than their larger counterparts.

While the tight labor market poses challenges for employers of all sizes, recruiting has been particularly difficult for small businesses as they have limited resources to provide competitive wages and benefits. Small businesses’ longer filling times and lower filling rates–defined as the number of removed postings over the number of active postings in the previous month–show signs of hiring struggles. However, the gap has narrowed in recent months as big businesses started to experience hiring freezes and layoffs creating opportunities for small businesses to add talent.

The recent tech downturn has also provided an opportunity for tech startups to finally attract and hire top talent. When we compare the differences in the share of new postings by sector between small and big businesses, we find that tech startups disproportionately put out more new postings since December 2022. Amid tech layoffs among the tech giants, tech startups are ramping up their recruitment efforts to find the best talent.

If you have any ideas of other metrics to track or would like to hear more, please feel free to?reach out.?

Many thanks!

Jin Yan & Beyza Arslan, Economists at Revelio Labs

For the full newsletter,?visit our site.

Revelio Labs?provides workforce intelligence. We absorb and standardize hundreds of millions of public employment records to create the world's first universal HR database, allowing us to see current workforce composition and trends of any company. Our customers include investors, corporate strategists, HR teams, and governments. Check out our archive of newsletters?here.