By Howard Schneider
(Reuters) – Like many businesses during the pandemic, Worxbee, a small company that provides virtual executive assistant services, brought in corps when Chief Executive Kenzie Biggins thought she had found a good match.
Peaking at 11 people, the hiring ultimately proved excessive, and Biggins’ workforce is now down to six, primarily through attrition. She intends to use technology and smarter management to achieve this.
“We’re not looking at hiring,” said Biggins, whose Greenville, South Carolina, firm matches executive assistants with executives who need them.
“We’re thinking about how we can increase our efficiency to actually reduce our costs… Prices have gone through the roof during the pandemic. Once we raise all these salaries, there’s no going back,” he said. she declared. “I think people have to make tough decisions to become more efficient with what they have.”
If the pandemic years were marked by labor shortages and the Great Resignation, the caution now shown by Biggins and others at the helm of America’s small businesses could indicate that a major rationalization is coming.
His cautious approach could also begin to show up in broader statistics, reinforcing what Federal Reserve officials see as a gradual slowdown in the labor market.
While this could be a boon to their efforts to bring inflation under control, it could further weigh on the public’s perception of President Joe Biden’s economic management heading into the November election if weak payrolls and of wage growth added to the shock of disproportionate price increases. which continue to weigh on its results in the polls.
“FALL TO ZERO”
U.S. jobs data for May will be released on Friday, and economists polled by Reuters estimate that 185,000 jobs were created last month, still more than the average monthly gain in pre-pandemic years. The unemployment rate is expected to stand at 3.9%, slightly higher than a year ago but low compared to historical averages.
But the landscape may be changing.
A National Federation of Independent Business survey of small business hiring intentions is near its lowest level since the start of the pandemic, leading Oliver Allen, senior U.S. economist at Pantheon Macronomics, to write recently : “The pressure on small businesses seems to be encouraging them to reduce their expenses. hiring.”
Noting that the NFIB survey correlates well with payroll growth in about four months, Allen said it is now consistent with “private sector employment growth falling to zero over the next few months.” month”.
In the latest government survey of business input prices, a fall in costs paid by recruitment services companies indicates a slowdown in wage growth, while the share of temporary jobs in the overall The labor market has fallen well below the peaks of the last three economic cycles. . Temporary hires offer companies a way to deal with tight labor markets, and their declining use is seen as a sign of economic slowdown.
A new series of data from the Philadelphia Fed, measuring the speed at which people change jobs, points in the same direction…
