TriNet April SMBeat Report

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Apr 18, 2013 - Following Economic Trends in Small Business. April 2013 ... Oregon tech companies see significant employm
April 2013

Following Economic Trends in Small Business SMBeat April Highlights National Employment Report: April employment levels showed a tepid 0.16% growth rate, continuing a three-month downward trend from a strong 1.06% start in January.

National Employment Report April employment levels showed a tepid 0.16% growth rate, continuing a three-month downward trend from a strong 1.06% start in January. Hiring at TriNet companies marginally outpace terminations by 0.16 basis points. New hires decreased to 2.73%, while terminations contracted to 2.57%.

What’s Hot?: Oregon technology employment grew 7.8% in April, fueled by accelerated VC investment in Portland. What’s Cold?: Despite favorable regulatory tailwinds, Massachusetts biotech companies see a net job decrease of -3.3%, much worse than the overall industry.

Employment Metrics

April Results

*Bracketed figures denote relative change from prior month.

Total Jobs

0.16%

RATE

TREND (-77.8%)

RATE

Hiring Rate %

2.73

TREND (-17.9%)

Quit Rate %

Discharge Rate %

1.38

1.17

(+4.1%)

(-7.5%)

Quit Rate %

Discharge Rate %

May Forecast

Total Jobs RATE

0.60%

TREND (+275.4%)

RATE

Hiring Rate %

3.16

TREND (+15.6%)

1.29

1.23

(-6.3%)

(+4.8%)

Employment Discussion April job creation contracted 78% from March to 0.16%, marking the weakest month since 2009. Plummeting hiring rates were largely responsible for decline in overall growth. Hiring was down to 2.73% in April, a drastic 17.9% decrease from March. Total terminations actually decreased slightly, down 1.2% to 2.57%, split between 1.38% voluntary quits and 1.17% involuntary discharges. The March BLS reported a total employment increase of only 138,000 jobs for the month. This marked a significant decrease from the 332,000

jobs added in February. The retail trade sector suffered a loss of 24,000 jobs, possibly reflecting the upcoming tax liabilities expected by consumers1. Additionally, the data on the slowing hiring rate in April appears to contradict recent surveys from the Silicon Valley Bank and Career Builder. The SVB survey reported that 87% of polled tech firms plan to hire this year2 , and the CareerBuilder survey predicted steady hiring for the second quarter3. Please see the Appendix for supporting charts and graphs.

BLS, The Employment Situation – March 2013 http://www.bls.gov/news.release/pdf/empsit.pdf Silicon Valley Bank: http://www.svb.com/News/Company-News/Looking-For-a-Job--Try-a-Tech-Startup/ 3 CareerBuilder: http://careerbuilder.presscentre.com/content/detail.aspx?ReleaseID=128&NewsAreaId=2 1 2

What’s Hot? What’s Cold? What’s Hot?: Oregon technology employment grew 7.8% in April, fueled by accelerated VC investment in Portland. Oregon tech companies see significant employment growth of 7.8% in April versus an industry-wide growth level of 1.01% across the country. This growth has been fueled by the largest spurt of Q1 venture capital funding since the dotcom boom1. The average annual salary of $86,000 for employees at Oregon tech companies, however, is slightly lower than the industry average of $120,000.

What’s Cold?: Despite favorable regulatory tailwinds, Massachusetts biotech companies saw net job losses of 3.3%, much worse than the overall industry. In April, Massachusetts biotechnology companies saw a net employment decrease of 3.3% versus a decrease of 0.82% for the broader industry. These job losses come as a surprise, in light of the $1 billion Massachusetts Life Science Initiative established in 2008 by Governor Deval Patrick2. The average annual salary of MA biotech employees is $94,000, approximately $10,000 less than the $104,000 industry standard.

9.6% 7.8% 7.2%

Oregon

INFORMATION TECHNOLOGY

94,339

1.8%

-3.3% Massachusetts

BIOTECH

$

$

85,953

3.9%

*Not seasonally adjusted. 1 The Oregonian, April 18, 2013 http://www.oregonlive.com/silicon-forest/index.ssf/2013/04/oregon_venture_capital_off_to.html The Metro West Daily News, March 27, 2013 http://www.metrowestdailynews.com/news/x2082720479/Life-science-is-a-life-saver-for-Bay-State-MetroWest

2

Appendix: Monthly Employment Metrics in Detail Chart 1: Overall Employment Trends 4.50% 4.00% 3.50% 3.00%

Hires % Hires Forecast

2.50%

Terms % Terms Forecast Net % Net Forecast

2.00% 1.50% 1.00% 0.50% 0.00% 3/12

4/12

5/12

6/12

7/13

8/12

9/12 10/12 11/12 12/12 1/13

2/13

3/13

4/13

5/13

6/13

7/13

Chart 2: Quits vs. Discharges 1.60%

1.40%

1.20%

Vol % Vol Forecast

1.00%

Ivol % Ivol Forecast

0.80%

0.60%

0.40%

0.20%

0.00%

3/12

4/12

5/12

6/12

7/13

8/12

9/12 10/12 11/12 12/12 1/13

2/13

3/13

4/13

5/13

6/13

7/13

Chart 3: Industry Hiring Trends

Hire % Term % Net % Average Salary

4.00%

$140,000 $120,000

3.00%

$100,000 2.00%

$80,000 1.00%

$60,000 0.00%

$40,000

-1.00%

$20,000 Financial Services

-2.00%

Information Technology

Healthcare and Pharma Tech

Personal Services

Professional Services

Retail/ Wholesale

$-

About SMBeat SMBeat provides a detailed analysis and a predictive forecast for trends in key human capital economic indicators for small businesses. All reported statistics are seasonally adjusted unless otherwise indicated. All reported months run from the 13th of the previous month to the 12th of the current month.1 TriNet generates payroll information by tracking real-time movements within its base of approximately 7,000 entrepreneurial businesses whose employees earn approximately $100,000 in annual base salary. These companies fall primarily into three broad industry segments: technology, professional services, and financial services. SMBeat aggregates and reports data reflecting compensation, hiring and retention (both involuntary terminations and voluntary resignations), and also provides ongoing analysis of contributing factors to these trends, including regional, industry and seasonal variables. Slight adjustments will be made to historical figures in time series charts if and when updated employment information about actual prior periods is obtained. Any significant changes will be called out in this section. Additional details can be found on the company’s SMBeat web page TriNet.com/smbeat. The SMBeat has slightly changed the monthly reporting cycle to end on the 12th of the month, which mirrors the methodology of the US Bureau of Labor Statistics.

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[email protected] Ambitions Realized