Layoffs at major US companies are translating into a recruiting opportunity for small businesses.
Job openings at small firms jumped 80% in February from the start of last year, compared to 20% for larger companies, according to a report from workforce intelligence firm Revelio Labs. That included greater interest from tech startups, which posted about 15% more openings in the three months through February compared to big tech companies.
Many small businesses have struggled to compete for talent in the tight labor market since the pandemic, unable to keep up with the robust wages and benefits that their bigger rivals have been able to offer. Tech companies such as Meta Platforms Inc. and Amazon.com Inc. have announced over 100,000 job cuts this year, giving smaller firms the chance to snag some of those workers.
“It was a surprising result, because I think some of the narrative here is that it is doomsday for startups or that funding has dried up,” said Ben Zweig, chief executive officer at Revelio Labs. “And that’s not really what we’re seeing.”
The trend might help explain why many of those announced layoffs haven’t fully shown up in the data yet. The information industry, which houses many tech positions, has only lost about 30,000 jobs this year, according to the Bureau of Labor Statistics. Meantime, openings in the industry have been recovering in recent months.
The combination of rising interest rates, persistent inflation and tighter access to loans since the collapse of multiple banks are likely to take a toll on small businesses going forward. The share of US small-business owners who plan to add workers in coming months slipped in March to the lowest since the onset of the pandemic as they faced the worst credit conditions in a decade.
Still, Zweig is confident that the banking crisis triggered by the collapse of Silicon Valley Bank will have a limited impact on small firms’ expansion plans. “In retrospect, it’s looking more and more like a momentary blip,” he said.