Small Businesses Once Again Create More Jobs Than Big Businesses

Employment growth in small businesses

Small businesses created almost double the new jobs in January 2014, compared with large businesses. And when you add growth among medium-sized businesses to the employment growth in small businesses, the numbers swamp the job growth of large corporations.

The ADP Employment Report showed that private-sector jobs grew by 175,000 during the month.  That’s a considerable drop compared with November and December.  However, that is “in line with the average monthly growth throughout 2013,” said Carlos Rodriguez, president and chief executive officer of ADP.

ADP defines small businesses as those with under 50 employees.  So it equates to millions of fairly small employers.  Medium sized businesses in ADP’s lexicon are those with 50 to 499 employees.  Some entities, such as the U.S. Small Business Administration, would define those as small businesses, too.  When you consider that, you see that the majority of net new jobs are coming from smaller employers.

And what types of industries are creating these jobs?  Well, it’s not manufacturing. Manufacturing jobs show a loss of 12,000 for the month.

Construction jobs were up.  Don’t get too excited, though. Professor Scott Shane has pointed out that the long term trend in construction startups is actually downward.

By far, most of the new jobs came from the service industries (160,000).  A large chunk of those were professional and business services. Transportation and utilities also grew.

ADP collects statistics based on actual anonymous payroll data from businesses that use its payroll services.  This data covers nearly 24 million U.S. workers. Then estimates are created for national employment numbers in collaboration with Moody’s Analytics.

12 Comments ▼

Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

12 Reactions

  1. Glad to hear some good news on the hiring front and while large companies get a lot of the press, small companies are the life blood of the economy.

  2. Of course they did, Anita!

    Small business has always been the driver of the US economy.

    More people need to know this, and understand the importance of small business.

    The Franchise King®

  3. Well its really a good news reg. revival of economy through small business, which at one time was being ignored. But now the situation has been changed & small business are the actual medium for better growth of economy.

  4. That’s nice to hear. It shows the role that small businesses play in the job or employment industry. In fact, some small businesses are not that choosy with employees compared to big corporations.

  5. I feel like this is usually the case, but maybe my memory is biased. Large companies get the press (and the tax breaks), but SMBs are what keep us going.

  6. Good stuff. The best way to support our economy is to support small business! Try to visit small businesses within your community at least once a month to find out what products and services they are offering. You may be surprised by what you find! SMALL BUSINESS = JOBS! Enough said!

  7. Good analysis on employment generation by small businesses. Thank god there is something people can look towards to find a job.

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