As Small Business Hiring Booms, Distributors Sit on the Sidelines - Modern Distribution Management

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As Small Business Hiring Booms, Distributors Sit on the Sidelines

Wholesale distribution, along with arts and entertainment, financial services and retail trade, slowed hiring efforts in January, according to a February report from the CBIZ Small Business Employment Index. Overall, the numbers for companies with 300 or fewer employees showed improvement over December statistics.
Specialty building products distributor GMS said Aug. 16 that Leigh Dobbs has been named chief human resources officer, effective Sept. 6.

As most industries allocate time, money, and other resources into finding new employees in a labor market where the national unemployment rate is hanging at 3.5% — and substantially lower in some areas — at least one index says that distributors are sitting on the sidelines. 

According to the CBIZ Small Business Employment Index (SBEI), which tracks hiring trends for U.S. companies with 300 or fewer employees, 2020 kicked off with a seasonally-adjusted increase in hiring of 1.61% for January. 

“This is a notable improvement over the 1.16% decline in December,” CBIZ SBEI says. “It is also a remarkable number for January, as companies tend to contract their labor forces due to the end of the holiday shopping season.”

73% Stand Strong 

Overall in January 2020, 50% of companies maintained their employment tally, while 23% built up their staffing, and 27% decreased their staffing. 

The insurance, information and real estate sectors all boosted hiring. The industries that pulled back on the hiring reins included wholesale distribution, arts and entertainment, financial services and retail trade.

Also see: MDM Quarterly Earnings Roundup.

Overall, 23% of small businesses increased staffing, 27% decreased hiring, and 50% made no changes to their previous hiring approach. Over the last six months, hiring dipped only during the months of September and December, according to CBIZ SBEI. 

Regionally, all areas of the U.S. saw hiring increases in January. The West led the pack with a 2.56% increase in hiring, followed by the Central U.S. at 1.67%, the Southeast at 1.53%, and the Northeast at 0.34%. “This month’s data was a pleasant surprise and suggested the overall strength of the sector heading into 2020,” CBIZ’ Philip Noftsinger said in a release

Also see: “Talent Acquisition Strategies for Distributors.”

“Not only did small businesses hang on to seasonal employees, but they brought on additional resources,” Noftsinger continued. “There are a number of tailwinds supporting this, with overall economic strength, the bipartisan trade agreement, and a milder-than-normal winter benefiting small businesses.”

While it’s difficult to pinpoint exactly why small distributors didn’t participate in the hiring boom in January, it could have been a higher degree of sensitivity to potential headwinds still in play from 2019, including economic, ongoing trade war and tariff concerns. 

Looking for a jump in sales numbers to support a boost in hiring effort? Talent management is one of MDM’s main focus areas in 2020. 

Join us at MDM’s 2020 Sales GPS Summit May 11-13 in Chicago, where industry experts will share how you can transform your sales function to increase your sales team’s effectiveness, drive greater sales, profit and customer retention. Check out the agenda today. 

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