Navigating Employment Trends Post-Pandemic: What Small Businesses Need to Know

The post-pandemic landscape has introduced significant challenges for small businesses, particularly when it comes to employment. From October 2023 to October 2024, the U.S. experienced its largest year-over-year decline in small business employment over the comparable timeframe since 2015. Compounding this, small business revenue has recorded a third consecutive year of declines. While these trends may feel disheartening, they also highlight critical opportunities for businesses to adapt and thrive moving forward.

For small business owners, this is a time to evaluate employment and payroll strategies critically. By leveraging the right insights and resources, you can position your business for stability in an otherwise turbulent climate.

What’s Driving the Decline?

The decline in small business employment can be attributed to several factors:

• Economic volatility has caused many businesses to cut back on hiring to conserve resources.
• The rising cost of doing business, including expenses tied to inflation, has strained budgets and reduced operational flexibility.
• Ongoing shifts in the labor market, from remote work preferences to talent shortages in key industries, have complicated staffing decisions for employers.

Despite these challenges, it isn’t all doom and gloom. Bright spots are emerging, and savvy business owners are attuning themselves to new trends that signal growth opportunities.

Finding the Bright Spots

Interestingly, financing has provided a short-term lifeline for many small businesses. With cash flow bolstered by loans or other funding avenues, some businesses have managed to hire strategically, scaling up or down depending on industry needs. This fluid environment has fostered opportunity for businesses that are willing to adapt.

By identifying industries or sectors that are demonstrating signs of stability or growth, small businesses can recalibrate their staffing strategies to align with areas of demand. For example:

• Healthcare and wellness sectors, driven by continued demand for services, have shown relative stability.
• Technology and e-commerce continue to be growth industries as businesses adopt digital-first models.
• Certain hospitality and leisure segments are bouncing back as consumers prioritize experiences.

Assessing these industry dynamics can help small businesses make informed decisions about hiring and long-term workforce planning.

Payroll Advisory as a Growth Opportunity

Given this environment of rapid adjustment and fluid employment, payroll advisory has emerged as a key area of opportunity. More small businesses are seeking professional guidance to ensure they can effectively manage staffing concerns while remaining financially astute. Here’s why payroll advisory matters now more than ever:

• Adapting to scaling needs: With businesses scaling up or down frequently, payroll advisors help ensure that staffing changes remain compliant with labor laws while maximizing cost efficiency.
• Cash flow planning: Payroll insights can help align staffing costs with cash flow to prevent financial strain.
• Compliance with tax laws: With employment regulations constantly changing, payroll specialists ensure businesses stay compliant to avoid fines and penalties.

Partnering with an accounting firm or payroll specialist can empower your business to handle these challenges with confidence.

Preparing for 2026

Looking ahead, 2026 offers opportunities for businesses to reset and strategize for growth. Small business owners should take key steps now to position themselves for success:

1. Evaluate workforce needs regularly to ensure staffing levels align with business goals and economic conditions.
2. Analyze industry trends to identify sectors showing strength and tailor your offerings to meet demands within those niches.
3. Leverage professional services, such as payroll advisory or HR consultations, to optimize workforce management.

Supporting Your Business at Every Step

At Cobb CPA, we specialize in helping small businesses find clarity in times of change. Whether you need support navigating payroll, managing cash flow, or refining your workforce strategy, our team is here to guide you at every turn.

Here’s what one of our clients had to say about working with us:

If your small business is ready to adapt and grow in the face of employment challenges, we’re here to help. Reach out to us today to discuss how we can support your success in 2025 and beyond.

Contact us to learn more about small business solutions tailored to your needs.

Book a Call