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March

100.73

-0.01% 12-month change

Understanding the Index

The jobs index provides a monthly, up-to-date measure of change in small business employment in the United States. It analyzes year-over-year worker count changes, trending the results to reveal movement in small business employment. An upward trend represents a strengthening job market, while a downward trend is a sign of a slowdown. You can read the full description of our methodology or review frequently asked questions for more information.

Index Overview

How the Index Works

Methodology

Partnering with IHS and their economic experts, Paychex developed an empirically-driven jobs index to present a unique and valuable indicator of small business employment in the United States. Utilizing readily available, aggregated payroll information from a subset of Paychex clients, the Paychex | IHS Small Business Jobs Index contains more businesses than nearly any other small business employment index and will be released earlier than other prominent employment reports. Rather than predict future results, Paychex and IHS believe the use of real payroll data provides the best and most accurate indication of current small business employment trends.

The Paychex | IHS Small Business Jobs Index analyzes year-over-year worker count changes, trending the results to reveal movement in small business employment; an upward trend represents a strengthening job market, while a downward trend is a sign of slowdown. Analyzing same-store worker count changes from approximately 350,000 small businesses clearly indicates trends in the current employment situation. Indexing the results creates a point of reference to identify and track current and historical small business employment trends.

Creation of the index involves several data processing steps, beginning with the extraction, transformation, and loading (ETL) of active payroll clients and their firmographic information. Data preparation and validation is next, consisting of, but not limited to, several stability checks and the removal of outliers. Subsequently, the same-store matching process is run. This same-store approach is often used by retailers to compare sales over a certain period, such as a year or a calendar quarter, with the same period at an earlier time. This allows large retailers to understand revenue gains or losses from existing stores, separating the distortion generated by new stores. This apples-to-apples comparison allows us to look inside small businesses to analyze worker count changes over a 12-month period, removing the "noise" generated by small business starts and failures. Once the same-store data set is developed, the worker count criteria are applied. For reporting, the monthly dataset is segmented by region, state, and metro areas, and summarized to average worker count for the application of the index formula. These state and metro analyses are based only on the 20 largest states and metros, based on U.S. population.

As the information used for the index is actual payroll data, not an estimate, monthly revisions will not be needed. However, periodic restatements may occur in the future, with any methodology updates announced.

The Paychex | IHS Small Business Jobs Index number is scaled to 100 during 2004, providing a baseline of small business employment health.

September 29, 2015 Methodology Update

The Small Business Jobs Index has expanded to include monthly reporting on eight industry sectors, including:

  • Construction
  • Manufacturing
  • Trade, Transportation, and Utilities
  • Financial Activities
  • Professional and Business Services
  • Education and Health Services
  • Leisure and Hospitality
  • Other Services (except Public Administration)

Definitions of each of the industry sector can be found here:
http://www.bls.gov/iag/tgs/iag_index_naics.htm.

Regional, state, metro, and industry indices will now be reported using the national baseline. Previously, each individual dimension or category used its own historical results to create its baseline of 100. Now, the results used to create the national index baseline during the 2004 timeframe will be applied across all dimensions or categories (i.e. region, state, metro, and industry) to allow for easier comparison of employment activity between regions, states, metros, industries as well as individual dimension comparisons against the national index.

Updating to the national baseline methodology will include a one-time shift to the level of each dimensional index. It will not affect how the index trends over time. If the dimensional index was performing better than the national index during the base year timeframe, it will shift higher, and vice versa. Historical data for the national index, as well as the growth rates for all dimensions, will not change.

In addition, base-year change reporting has been added to allow for the continued ability to analyze each individual dimension against its own performance during the 2004 baseline timeframe, as was possible using the previous index methodology.

For comparison purposes, September 2015 results under the previous methodology are available upon request.

Frequently Asked Questions

  • What is the Paychex | IHS Small Business Jobs Index?

    The Paychex | IHS Small Business Jobs Index is a monthly, up-to-date indicator of change in small business employment in the United States.

  • What is the purpose of the Paychex | IHS Small Business Jobs Index?

    The Paychex | IHS Small Business Jobs Index provides timely and accurate insight into national and regional small business employment trends. The "same-store" approach allows us to analyze trends over time, using aggregated data from approximately 350,000 businesses with less than 50 workers, a subset of the Paychex client base. The Paychex | IHS Small Business Jobs Index serves as an indicator of the overall economy because small businesses account for nearly 95 percent of firms in the U.S., according to the Bureau of Labor Statistics.

  • How does the Paychex | IHS Small Business Jobs Index work?

    The Paychex | IHS Small Business Jobs Index analyzes year-over-year worker count changes, trending the results to reveal movement in small business employment. An upward trend represents a strengthening job market, while a downward trend is a sign of a slowdown.

  • What does the Paychex | IHS Small Business Jobs Index number mean?

    The Paychex | IHS Small Business Jobs Index tracks current and small business employment trends. The index number is scaled to 100 during 2004. If the index trends down it is a sign of a decrease in small business employment. If the index trends up, it is a sign of increase in employment. Values above 100 indicate performance above pre-recession 2004 levels. We can compare the index from past months and years, and with dates of significant economic occurrences to study historical trends.

  • Why is the Paychex | IHS Small Business Jobs Index important?

    The index is important because businesses with fewer than 50 employees make up nearly 95 percent of firms in the U.S., providing a meaningful view of the country’s overall employment picture. The Paychex | IHS Small Business Jobs Index measures monthly small business employment trends from up-to-date payroll data from approximately 350,000 small businesses.

  • What makes the Paychex | IHS Small Business Jobs Index different from other similar reports and indices?

    The Paychex | IHS Small Business Jobs Index uses up-to-date, aggregated payroll data from approximately 350,000 of Paychex's small business clients with fewer than 50 workers, one of the largest sample sizes for any small business index or report in the country. The Paychex | IHS Small Business Jobs Index focuses on one key indicator: same-store worker count, tracked year-over-year, providing the freshest data and the most current look at small business employment. Rather than predict future results, Paychex and IHS believe the use of real payroll data provides an accurate indication of current small business employment.

  • Why use the "same-store" approach of analysis for the Paychex | IHS Small Business Jobs Index?

    This same-store approach is often used by retailers to compare sales over a certain period with the same time period from the past (comparing this year to last year or one calendar quarter to another calendar quarter, for instance). This allows large retailers to understand revenue gains or losses from existing stores, separating the distortion generated by new stores. This apples-to-apples comparison allows us to look inside small businesses to analyze worker count changes over a 12-month period, removing the "noise" generated by small business starts and failures.

  • Is the Paychex | IHS Small Business Jobs Index expected to track closely to the monthly employment numbers released by the BLS?

    The Paychex | IHS Small Business Jobs Index is different from what is issued by the BLS. The index uses real payroll data from approximately 350,000 small businesses from the Paychex client base to provide a monthly, up-to-date indicator of change in small business employment. While the data used differs from the BLS, small business employment tracks very closely to what the BLS reports as part of its Business Employment Dynamics Summary, so it's possible that the Paychex | IHS Small Business Jobs Index will, with some exceptions, track closely to the Business Employment Dynamics Summary.

  • Does the Paychex | IHS Small Business Jobs Index provide a measure of employment?

    The Paychex | IHS Small Business Jobs Index provides a monthly, up-to-date indicator that is highly correlated with the change in small business employment in the United States. The U.S. Department of Labor's Bureau of Labor Statistics (BLS) provides the official measure of employment in the United States each month.

  • What is the methodology being used for the Paychex | IHS Small Business Jobs Index?

    You can read the full description of our methodology on the Paychex | IHS Small Business Jobs Index website.

  • When will the Paychex | IHS Small Business Jobs Index be available?

    The Paychex | IHS Small Business Jobs Index will typically be released on the Tuesday prior to the first Friday of the month. View the Index Release Calendar for the Paychex | IHS Small Business Jobs Index.

  • Is historical data available through the Paychex | IHS Small Business Jobs Index?

    Yes. The Jobs Index data has been tracked back to 2005. Historical data is available on the Paychex | IHS Small Business Jobs Index website.

  • Do Paychex and IHS make supporting data available for analysts?

    Yes. In addition to the Paychex | IHS Small Business Jobs Index, the companies have additional data available for a fee. Please visit IHS US Regional Service for more information.

  • What are the respective roles of Paychex and IHS in the Small Business Jobs Index?

    As a leading provider of payroll, insurance, human resources, and benefits outsourcing services for small businesses around the country, Paychex has the expertise and data available to provide the most timely and accurate look at small business employment trends. IHS has over 50 years of expertise in economic forecasting, with comprehensive forecasts, data and analysis of the global economy and the U.S. economy at a national, regional, state and metro level. As the leading source of information, insight and analytics in critical areas that shape today's business landscape, IHS helps businesses and governments make high-impact decisions and develop strategies with speed and confidence.

  • Does the Paychex | IHS Small Business Jobs Index represent change in the Paychex client base or reflect Paychex business results?

    No. The jobs index is developed from a monthly, current measure of change in small business employment from selected Paychex clients in the U.S. and does not predict future Paychex business or financial results. The index is based on data from what is only a subset of the Paychex client base, and using the same-store concept does not reveal any information about changes in the Paychex market share. The index methodology analyzes only changes in employment; additional factors such as new sales volume and ancillary product penetration greatly impact Paychex business results. Paychex results are discussed through its quarterly earnings report. View the latest financial news.

  • Who created the Paychex | IHS Small Business Jobs Index?

    The Jobs Index was created by a team of highly qualified data scientists at Paychex, with input and consultation from IHS. Please visit the About the Authors page for more information.

  • Who can I contact for more information?

    For more information on the Paychex | IHS Small Business Jobs Index, please email smallbusinessjobsindex@paychex.com. For media contacts for Paychex and IHS, visit the News Release & Media Inquiries section.

  • Why was the index methodology updated in September 2015?

    The Small Business Jobs Index was updated in September 2015 to incorporate the monthly reporting of eight industry sectors. At that same time, the index for each region, state, metro and industry also transitioned to a national baseline methodology. By applying the results used to create the national index baseline of 100 (during the 2004 timeframe) across all categories, users are able to better compare employment activity between regions, states, metros, and industries. Previously, each individual dimension or category used its own historical results to create its baseline of 100. In addition, base-year change reporting was added in September 2015 to allow for the continued ability to analyze each individual dimension against its own performance during the 2004 baseline timeframe, as was possible using the previous index methodology.

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