Private sector added 455K jobs in March

Private sector employers added 455,000 jobs this month, payroll giant ADP reported Wednesday, as the economy continued to bounce back despite the ongoing pandemic, although continuing labor shortages held back stronger growth.

Small businesses added 90,000 jobs in March, according to the ADP National Employment Report, including 37,000 at businesses with between one and 19 employees and 53,000 at businesses with between 20 and 49 employees. Medium-size businesses with between 50 and 499 employees gained 188,000 jobs in March. Large businesses added 177,000 jobs, including 59,000 at companies with between 500 and 999 employees and 118,000 at organizations with 1,000 employees or more. The service-providing sector added a total of 377,000 jobs for the month, including 61,000 in professional and business services such as accounting and tax preparation, 12,000 in financial activities like banking, and 161,000 in leisure and hospitality. The goods-producing sector gained 79,000 jobs, including 54,000 in manufacturing and 15,000 in construction. Franchise employment increased by 11,200 jobs.

Patrick T. Fallon/Bloomberg

While the hiring pace was robust, labor shortages are dampening job growth. “The pace for the month is strong, but still down from the half million monthly job pace average over the last six months,” said Nela Richardson, chief economist at ADP, during a conference call Wednesday with reporters. “Year-to-date, job gains reached 1.5 million. Other labor data signals that the recovery continues at a solid pace. For example, jobless claims are near the lowest levels since September of 1969, and that’s a signal to us of just how reluctant firms are to lay off workers in the current environment.”

A recent data release from the U.S. Bureau of Labor Statistics points to a high number of job openings, Richardson noted, which continued to hover at record highs in February.

The professional and business services sector was one indication of demand. “Within this sector, high-paying professional service jobs actually had the weakest gains since July of 2021,” said Richardson. “Where we saw strength was actually in those lower-paying administrative and support services roles tied to the rise in office reopenings at the start of this year.”

A recent AICPA Economic Outlook Survey found that 82% of CPA business executives said their organizations were having at least some difficulty with recruitment and retention, with 17% characterizing it as extreme difficulty. Approximately 31% of survey takers said mid-level staff openings have been the hardest jobs to fill, while 28% said the problem is across the board. One in four pointed to entry-level positions as the most challenging category to recruit.

While 40% of business executives said unfilled jobs have not made a significant impact on their operations, a majority said the problem had manifested itself in several ways, prompting organizations to restructure staff to protect core operations (24%), limit new projects or bids (23%), delay service expansions (16%), slow customer and client acquisition (9%), reduce hours of operations or work shifts (7%), and close some work locations (3%).

“We know from our survey that 57% of business executives report they have too few employees,” said Ash Noah, vice president and managing director of CGMA learning, education and development for the Association of International Certified Professional Accountants, in a statement Wednesday. “Pandemic-related trends such as the Great Resignation have complicated an already difficult hiring situation, and that can exacerbate burnout and disaffection among remaining staff if the situation isn’t managed carefully.”