Guideline clients see robust job growth, far outpacing small business job gains nationwide
Job growth is strong at small businesses that offer a Guideline 401(k) plan, despite softening economic indicators nationwide, new data from Guideline shows.
Guideline’s clients are adding jobs at about ten times the rate of small businesses nationwide, based on our analysis and benchmarks from ADP. We analyzed anonymized employment data on job gains and losses at over 9,000 small businesses offering Guideline 401(k) plans, from August 2018 to August 2019. At our smallest businesses with up to 19 employees, job growth over this twelve month period was 21%. Job growth at companies with 20-49 employees was 27%, and at companies with 50-499 employees, the number of jobs increased by a whopping 40%.
It’s important to note that our methodology for measuring job growth is different from that of ADP, whose estimates we are using as an indicator of the small business job market nationwide. For our analysis, we counted the actual net percent change in the number of jobs at Guideline clients that had employees at both the beginning and end of this twelve month period. In contrast, ADP uses a complex methodology that results in an estimate of nationwide employment by taking into account weighted payroll data, industry employment estimates from the Bureau of Labor Statistics, unemployment claims, oil prices, and other factors. Notably, ADP’s methodology counts job gains and losses due to companies opening and closing, whereas ours does not.
That said, we believe that the robust job growth we’re seeing at Guideline small businesses has much to do with who Guideline clients are. A small business that chooses to offer its employees a 401(k) plan tends to be in a strong financial position, and is investing in the employee experience with an eye towards growth.
Of course, we like to think that our easy-to-use, low cost 401(k) plans might have helped a little, too.
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We analyzed anonymized employment data from over 9,000 companies that offer Guideline 401(k) plans. Our analysis counted job gains from company expansions and job losses from company contractions, but not gains and losses due to companies being founded or going out of business. Companies were sorted into size categories based on their maximum employee count during the twelve-month period.
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