Paychex found a small uptick in employment growth among small businesses in November.

The Paychex | IHS Small Business Jobs Index, which the payroll giant produces with the research firm IHS, increased in November, moving from 100.34 to 100.42, signaling modest gains in employment levels at small businesses across the U.S. The national index increased 0.08 percent from the previous month, but declined 0.31 percent from November 2014.

“In November, it was nice to see a slight improvement in the rate of job growth for small businesses,” said Paychex president and CEO Martin Mucci. “We continue to see consistent job growth. It’s been 50 months that we’ve been above 100.”

The Mountain region of the country was once again the top-performing regional index. Washington continued to lead states tracked by the index, followed by Texas and Florida. Dallas remained the top-ranked metro area by a wide margin.

“From a regional perspective, the Middle Atlantic and Pacific had the best one-month positive growth,” said Mucci. “Over the whole year most of the regions are down, except for the Middle Atlantic. Generally the Middle Atlantic has been dragging behind, so it was nice to see them have some growth year over year.”

Much of the growth for the region appears to be coming from New Jersey. “I think they were at a bit of a low point last year,” said Mucci. “New Jersey was actually up strongly over last month at about 1.5 percent, and then almost a 3 percent better rate of job growth than last year. When we look a little deeper at that, it looks like construction is part of that and leisure and hospitality. I think we were at a low point last year with New Jersey, with all of the Atlantic City [hotel and casino] closures settling in. Now it’s starting to bounce back a little bit. That is good news for the Northeast, which hasn’t had great growth.”

Washington improved 0.45 percent to 103.20 and remained the top-ranked state index. At 100.58, New Jersey is up 1.53 percent from last month and 2.86 percent from last year, the best growth rates among states. Employment growth slowed in New Jersey in 2014, but has increased in 2015. Georgia fell 0.85 percent from October to November and is down 1.45 percent in the last quarter. With index levels near or above 102 since 2012 through last month, the sustained employment growth in Georgia has slowed quickly since hitting an eight-year high in February 2015.

In terms of metropolitan areas, Dallas continues to extend its lead as the top-ranked metro index at 106.54, up 2.35 percent year-over-year. In addition, Seattle moved up 0.43 percent to 102.85 to distinguish itself as the second-ranked metro index. Falling to 99.76, Houston is down 3.84 percent over the past 12 months and is under 100 for the first time since 2010. Gaining 0.80 percent in November, New York City had its best one-month increase in nearly five years, 0.80 percent.

In terms of industries, Other Services (except Public Administration), as defined by the Bureau of Labor Statistics, ranked as the top industry sector for small business employment growth across the country, while the manufacturing industry ranked the lowest, and its 12-month growth rate is also the lowest. Construction and financial activities had the lowest one-month growth rates in November, declining 0.11 percent.

Mucci sees a role for accountants in helping their small business clients maintain growth. “I think that they can continue to help with regulatory requirements, particularly around part-time employment, because we saw part-time again taking another bump,” he said. “It’s up to almost 9 percent of total employment. There does seem to be more of a sharing economy. There tend to be more part-time new hires than full-time. I think accountants can certainly continue to advise their small business clients on how to hire part-time employees and to watch out for the overtime rules and the Affordable Care Act, if they’re getting near 50 full-time employees.”

Mucci is also seeing more aggressive tax enforcement by the IRS and state tax authorities. “The IRS is coming out a little bit tougher on businesses on the regulations and the rules,” he said. “I think accountants can play a major role in helping small businesses fulfill the regulations and rules. The enforcement seems to getting a little more difficult and aggressive at the IRS and the state level. They’re not as quick to abate penalties as they used to be, probably because they’re looking for the revenue.”


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