Shutdown Headaches, Jobs Consistent and Hours Worked Up, Bank Preferences

Hey, everybody, this is Gene Marks, and welcome to this week's episode of the Paychex THRIVE Week in Review. This is where we take a few items in the news, and we discuss that because they impact your small business and mine. So, let's get to it, shall we?

The big news this week is that the Senate has approved a funding deal to end the longest U.S. government shutdown. It passed 60 to 40, but it does still avoid certain things related to health care. The Senate got a band of about eight Democrats to join together with Republicans to approve a funding measure during the week. The bill goes to the House and should be signed by the president, hopefully, by the time you're hearing this, but at the very latest, by the end of the week.

The bill itself has created lots of problems for a lot of business owners trying to get services from the government, and a lot of people that are traveling, as well as air traffic controllers not coming to work has caused the FAA to limit flights by about 10%, with threats to limit even more.

So, there's been a lot of disruption that's been caused by the federal government shutdown, but now it looks like it is over, or at least deferred until earlier in 2026.

So, a few things to take away from this. If you're a business owner. Things won't happen immediately. If you're expecting payments from the government, expect them still to be delayed until they get back in operation. Number two, if you're trying to get services from organizations like, the U.S. Department – State Department – for your passport or from the IRS for questions from taxes, you can also expect those – all those agencies to be fully up and running sometime by the end of next week.

So, you should probably be holding off before you start pursuing and trying to get answers to your questions on those things.

And finally, this has just been deferred until the end of January. So, bear in mind that this situation could rear its head again. For all we know, that could happen, and if that does happen, we want to be prepared for that. So, it's always, always important to make sure that if you're doing work with the government or relying on government services, that you've got cash in reserve, that you're also trying to diversify your business so that you are not fully reliant on the federal government for all of your business. It's very, very important to keep that in mind.

But the good news is the shutdown has been stopped. Things should be back in operation very soon. And for those of us like me who are frequent travelers, that's also good news for us at the airports.

Moving on to our next bit of news, the Paycheck Small Business Employment Watch was released just this week, as well. This is an employment watch that takes a payroll data of about 350,000 Paychex clients to see how they are doing. These are mostly small businesses. And what does the employment watch show for the month of October?

U.S. small business employment growth remained consistent as weekly hours worked reached near a decade high. According to this watch, which again uses payroll data from Paychex with the small businesses with less than 50 employees, small business employment levels remain consistent in October, which is good news.

Hourly earnings growth, however, for U.S. small businesses slowed to 2.58%, remaining below 3% for the last 15 months. That's a concern, I think, for many because hourly earnings drive consumer spending, and that is tracking below inflation. Small business employees experienced an increase in their weekly earnings, though, due to greater hours work during the month.

John Gibson, who is the CEO and president of Paychex, here's what he said:

“The small business labor market remains stable among firms with less than 50 employees. We are also observing an emerging trend of employers increasingly relying on their existing client talent more, to work more hours. Weekly hours worked rose across all regions in October.”

He said this marks the second consecutive month one-month annualized growth was above 3%, something not seen in nearly 10 years.

“We continue to hear from small business owners that the supply of qualified labor remains an ongoing challenge and is leading them to look for ways to get more out of their existing workforce,” he said.

So, the bottom line is that, according to Paychex, small business hiring has remained steady. Wage growth remains below 3%, but workers are earning more money because they're working more hours as employers are leaning on their existing staff to get more work done.

Finally, a report from Yahoo Finance about small business owners and local community focused lenders. Nearly 60% of them favor local, community-focused lenders over banks. This was a survey of research by Academy Bank. They studied 222 U.S. small business owners, found that 58.9% got their most recent business loan from a community of regional banks, compared with 31% who secured from a national bank, etc., etc.

For many small business owners, the choice of lenders about the kind of relationship they'll get. In this survey, the top three factors small business owners said mattered most when choosing a bank where:

• Ease of the application process
• Competitive interest rates, and
• Personalized service and financial guidance

I have to say anecdotally that I see the exact same thing. I have a lot of clients all across the country, and certainly a few of them, you know, quite a few of them deal with the larger, you know, multinational banks, that and the global banks.

But the vast majority of the small business owners that I talk to and deal with, they seem to go with their community, independent and local banks. They have relationships with them. They can get good services with them. A lot of these banks have forged partnerships with larger financial institutions to manage money, to transfer money better. And again, they just get better response from their local bankers.

So, I kind of agree with that. I kind of see it out there, and I have to admit that, you know, if you are looking to do banking, looking for a loan, I think you're going to find, you know, a better relationship, potentially a better experience for the regional or local bank rather than one of the big international banks.

One final thing if you are looking for financing this year, banks that are … Small Business Administration (SBA) certified banks, they're going to offer you the best loans, the best deals, the best chances of getting a loan through their 7(a) and 504 loan programs.

So, if you are looking for financing, my advice to you is to look at your local community and independent banks, particularly those banks that are SBA-certified, get a loan through them, as well. You might have a better experience and a better relationship going long term.

You've been watching and listening to the Paychex THRIVE Week in Review. This is where we take a few items of news and review it for you. I hope you've got good information here. If you need any more information or help in running your small business, please sign up for our Paychex THRIVE newsletter. You can go to paychex.com/thrive.

Thanks very much for watching or listening. We'll see you again next week with another edition of the Paychex THRIVE Week in Review. See you then.

Do you have a topic or a guest that you would like to hear on THRIVE? Please let us know. Visit payx.me/thrivetopics and send us your ideas or matters of interest. Also, if your business is looking to simplify your HR payroll benefits or insurance services, see how Paychex can help. Visit the resource hub at paychex.com/worx. That's W-O-R-X. Paychex can help manage those complexities while you focus on all the ways you want your business to thrive.

I'm your host, Gene Marks, and thanks for joining us.

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