The National Association of Professional Employer Organizations (NAPEO) today released its quarterly Small Business Snapshot, which shows that daily revenue among small businesses is 31 percent lower than it was when the year began, and that a large percentage of small businesses (74 percent) report the pandemic has had a “large” or “moderate” negative impact on their business. On the positive side, the number of businesses reporting a large or moderate impact on business has declined consistently since its high of 89.9 percent in May. The improving unemployment rate, now at 6.9 percent, is still 3.3 percentage points higher than it was one year ago. By state, unemployment rates are now highest in Hawaii, Nevada, and New York.
“Our economic data, while not surprising, is yet more evidence of the fact that small businesses across the country are being hit hard by the pandemic, although things do seem to be improving slightly as the year comes to a close,” said Pat Cleary, NAPEO’s president & CEO. “We’re proud of the small but important role PEOs have played in helping their small business clients through this crisis, including assisting them in interpreting and complying with coronavirus-related legislation, managing the transition to remote work, applying for PPP loans, and taking care of their employees.” A recent analysis by McBassi & Company shows that PEO clients were 72 percent more likely to receive a PPP loan in round one than other small businesses; 91 percent less likely to still be temporarily closed; and 60 percent less likely to have permanently closed.
NAPEO’s Small Business Snapshot is a quarterly compilation of data from the Bureau of Labor Statistics, ADP Employment Report, Wells Fargo/Gallup Small Business Index, Paychex Small Business Wage Data, and NAPEO that focuses on providing insight into the current state of the small business sector and the PEO industry. The report is compiled by noted economists Laurie Bassi and Dan McMurrer of McBassi & Company.
There are more than 900 PEOs in the U.S. that provide payroll, benefits, and other HR services to some 175,000 primarily small and mid-size businesses employing 3.7 million people. PEOs help businesses improve productivity, increase profitability, and focus on their core mission. Through PEOs, the employees of small businesses gain access to employee benefits such as 401(k) plans; health, dental, life, and other insurance; dependent care; and other benefits typically provided by large companies.
The NAPEO Small Business Snapshot for Q4 2020 is available here.