ADP Jobs Report Shows Why Small Biz Will Be the Innovators Coming out of This Recession
- 5 Comments
- January 7th, 2009
The ADP Small Business Report shows that the job losses among small businesses were steep during December 2008. Small businesses lost 281.000 jobs during December.
Note that small businesses have not lost as many jobs as larger companies. As the above chart shows, in December some 693,000 jobs were lost at all company sizes. Roughly 60% of the job losses were at medium to large businesses (the green line) as compared with job losses in small businesses (the blue line).
This is why I think small businesses have a good shot at getting ahead during this slow economic period compared with their larger brethren (assuming they have the free cash flows to get through it).
The big companies are reeling from job losses and expense reductions. Positions are being cut and corporate employees are distracted and fearful they will be next. Employees will be afraid to step out of line and takes risks on anything unproven or new in that kind of environment.
The money is no longer as free flowing in larger businesses for skunk-works projects and new innovation. If something doesn’t hold the promise of near term ROI … managers certainly aren’t going to devote their already reduced budgets to it. A perfect example of this is Google, which in the past was known for its employees having time to work on pet projects —well, not so much anymore.
For purposes of the report ADP defines small businesses as having fewer than 50 employees. ADP’s data is based on about 400,000 businesses (of all sizes) covering 24 million employees. It’s not full data on the entire workforce, but it is a significant sampling and therefore I put stock in the numbers.