CBIZ said its index of small business employment suffered its largest drop in employment last month since January 2010.

The January CBIZ Small Business Employment Index, which is designed to serve as a barometer for hiring trends among companies with 300 or fewer employees, decreased by 2.62 percent through the month, after posting a increase of 1.54 in December, a 4 percent drop month over month. The index is based on the 3,000 small businesses for which CBIZ Payroll Services manages payrolls.

In contrast, ADP reported a gain of 97,000 jobs last month among small businesses of less than 50 employees for which it handles payroll, while Intuit reported 70,000 new jobs were created at small businesses with fewer than 20 employees that run Intuit Online Payroll (see ADP Sees 187,000 Jobs Added in January and Intuit Sees Small Business Employment Grow).

The decrease reported by CBIZ is attributed by the accounting and consulting services provider to the seasonal hiring trends in the small business sector, which tends to be more volatile than larger business sectors. 

“This month’s report is a significant step back from the gains we saw in the fourth quarter,” said CBIZ Payroll Services business unit president Philip Noftsinger in a statement. “Certainly there is some seasonality that was anticipated in the report, but I don’t think you can ignore the size of the change. That said, it’s important to be cautious and not overreact to a one-month change.”

The survey also saw the percentage of companies decreasing employee headcount spike to 34 percent in January, a jump from 20 percent the month before. Of the 2,901 companies included in the survey for January, almost half saw no change to their employee headcount, highlighting the uncertainty that remains in the sector. 

“The companies that employ fewer than 300 people are more prone to swings in payroll headcount,” said Noftsinger. “What we’ve seen in this month’s data looks to be a seasonal reduction in staff and we expect the longer term trend to be more consistent with a slow-paced economic recovery.”

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