Many of the nation's small businesses have likely seen significant improvement in the course of the last several years as the effects of the recession continue to fade, and may now feel that they're in a better position to hire new workers. That trend certainly continued in the final month of 2013, as independent enterprise once again led the way in job creation.
Nationwide, nonfarm private employment rose by 238,000 jobs in December, on a seasonally adjusted basis, and of that number, 108,000 were added by companies with between one and 49 employees, according to the latest ADP National Employment Report. In contrast, medium businesses – those with 50 to 499 workers on the payroll – hired 59,000 more workers throughout the month, while large businesses of 500 or more employees took on 71,000.
On a more granular level, however, the smallest businesses were among the most active hirers during the month, the report said. Of the 108,000 small business hires, 55,000 came from companies with fewer than 20 employees, compared with 74,000 to companies that already had more than 1,000 workers. In addition, enterprises with 20 to 49 people on payroll added 53,000. Meanwhile, businesses with 500 to 999 employees actually cut some 3,000 jobs in December.
Growth going steadily along
The total of 238,000 jobs added by businesses of all sizes last month was the largest seen all year, surpassing November's figure of 229,000, the report said. This came even as the number of jobs in the services-providing industry actually slipped by some 12,000 to 170,000. The goods-producing sector brought above 69,000 new people, well up from November's total of 46,000, thanks in large part to the rate of construction hires. This sector in particular had the best single month for hiring since 2006, and accounted for 48,000 of those 69,000 new jobs. In all, goods producers added some 286,000 new jobs over the course of 2013.
Meanwhile, service-providing companies brought aboard close to 1.9 million new people nationwide last year, the report said. Most of the improvement was more or less evenly divided between transportation, trade, and utilities companies, which added 47,000 jobs in December alone. The slowest month for growth overall was April, during which only 124,000 jobs were added, but overall there were seven months in which the private sector took on at least 185,000 new employees, the report said.
"The job market ended 2013 on a high note," said Mark Zandi, chief economist of Moody's Analytics. "Job growth meaningfully accelerated and is now over 200,000 per month. Job gains are broad-based across industries, most notably in construction and manufacturing. It appears that businesses are growing more confident and increasing their hiring."
Hiring new employees isn't always the easiest thing for any small business to do, and as such the decision to begin such a process must be carefully considered before any action is taking. While many may be eager to add talent that can theoretically help them to expand and succeed, it's also important to note that hiring for the sake of doing so usually isn't the best tactic to employ. Instead, owners should carefully consider the ways in which such a decision would affect their bottom lines both now and in the long term.
Taking the time to consider company-wide expenses, and whether they're larger than they need to be, could be a great first step in this regard. For instance, finding more affordable small business insurance can save companies thousands of dollars per year. Shopping around for lower costs on liability insurance and other types of coverage is often a judicious way to begin.