The Paychex Small Business Employment Watch for 2024 shows that small businesses with fewer than 50 employees experienced modest job growth throughout the year. While the national jobs index remained stable, wage growth in small businesses slowed down. As we head into 2025, small business owners continue to face challenges, yet remain optimistic about the future.
National Jobs Index and Wage Data Highlights
The national small business jobs index averaged 100.22 in 2024, signaling modest employment growth. However, the index showed a slight decline of 1.32 percentage points from 101.21 in December 2023 to 99.89 in December 2024. This reflects a downshift in the pace of growth as the year progressed.
Despite this, hourly earnings growth for U.S. small business workers remained steady at 2.96% in December, staying below the 3% mark for the fifth consecutive month.
Regional and Metro Insights
Midwest Region: The Midwest continued to lead small business employment growth with an index of 100.20, marking its place as the top region for seven consecutive months. Within the Midwest, Wisconsin ranked second nationally with an impressive score of 100.77, its best ranking since March 2020.
Top Metro Areas for Job Growth:
- Dallas ranked first in job growth among metro areas, with an index of 101.73.
- Houston followed closely in second place at 101.16.
Hourly Earnings Growth: Tampa saw the highest hourly earnings growth, reaching 4.56% for the second consecutive month, reflecting the city’s growing economic recovery.
Challenges and Future Outlook
As 2025 approaches, small businesses continue to face challenges, including access to growth capital, rising healthcare costs, and the difficulty of hiring qualified talent. However, the optimism and hiring intentions of small business owners improved by the end of 2024. These trends will be closely monitored in the coming year, as they could shape the job market in 2025.
John Gibson, Paychex president and CEO, emphasized that Paychex will continue to focus on providing solutions to support small business growth, such as:
- Paychex Flex Perks
- Paychex Recruiting Copilot
- HR Analytics with AI Insights
- Paychex Funding Solutions
- Paychex FlexEngage
These tools are designed to address the evolving challenges faced by small business owners, from healthcare savings to recruitment and data-driven insights.
Despite a slight downshift in the pace of job growth, small businesses remain resilient. The Paychex Small Business Employment Watch for 2024 offers a detailed snapshot of the employment landscape for small businesses, shedding light on regional differences, wage trends, and the ongoing challenges faced by employers. As we enter 2025, optimism remains high, with small businesses continuing to adapt to changing economic conditions.
