While overall SMB job growth is starting off slower than last summer, the layoff rate has not budged over the past year, according to platform data from 300,000+ businesses. Firms in Leisure and Hospitality sector are growing faster and paying more for new workers than last year as well. Firms in Tourism and Sports & Recreation are notching the largest gains in Gusto’s New Hires Pay Index, a leading indicator of competition in the job market.
- In June, pay among newly hired workers was 6.7% lower than pay for those hired this time last year, led by decreases in the index within Education (-7.9%), Real Estate, (-6.0%), and Mining & Oil (-5.4%). Workers in Tourism (+13.0%), Sports & Recreation (+6.9%), and Salon & Spa (+6.9%) saw the fastest pay gains.
- SMB employment grew by 1.4% in June, down from 1.9% growth last June. The fastest-growing industries this month were Accommodations (+11.5%), Tourism (+4.0%), and Sports & Recreation (+3.7%).
Gusto’s New Hires Pay Index
Gusto’s New Hires Pay Index tracks business competition for workers in real-time. It’s the change in wages paid to employees hired this month compared to a year ago. This index fell slightly to -6.7% in June 2023, meaning businesses paid new workers a wage 6.7% less on average than new hires last year, a sign of continued easing of competition among employers looking for workers.
Across all sectors, SMB employment increased 1.4% in June 2023, compared to a 1.9% increase in June last year. Driving this change was a fall in the hiring rate, which fell from 4.2% to 3.6% over the past year.
While the lower hiring rate indicates firms are less eager to expand compared to last year, the layoff rate has also ticked down slightly from 1.3% to 1.2% over the past year – a signal that firms are not looking to actively reduce staff.
About the data
Gusto pay and hiring trends data is derived using Gusto’s real-time payroll data from over 300,000 small and medium-sized businesses across industries and across the country. New Hires Pay Index calculates the percent change in average annualized pay between workers hired in a given month and those hired one year earlier.
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