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Exclusive: New Homebase research reveals the smallest business’ biggest hiring advantage



New Homebase research reveals the smallest business’ biggest hiring advantage

#Homebase #research #reveals #smallest #business #biggest #hiring #advantage

Summary: Consistent with economic research, the largest companies using Homebase hiring software post jobs with the highest target hourly wages. Surprisingly, however, I find that some of the smallest companies using Homebase hiring software — those with just one to four employees —  are willing to pay as much as 10% higher than those with 20-49 employees, giving them a newfound competitive edge in a challenging market for talent. 



Hiring is top of mind these days, as businesses of all sizes continue to compete for workers in a tight labor market. And, given that one of the most consistent findings in labor economics is the fact that larger companies pay higher wages than smaller companies, you’d expect the biggest employers to have little competition in terms of pay. 

Interestingly, in my own recent research into Homebase hiring data, I’m finding a surprising result: Companies with one to four employees are willing to pay prospective employees 10% more than companies with 20-49 employees — making these businesses worthy competitors. 

Source: Homebase hiring data (January 2021 – March 2022). Note: Results from regression predicting Ln (target hourly wage) as a function of total number of employees, state, month, year, month*year, specific business description (e.g., grocery store, pet store, consulting) and select job roles (e.g., chef, baker). Controlling for NAICS codes or coarse business descriptions yield comparable results; controlling for MSA, city or zip code as opposed to state yields consistent results, as does estimating models without controls. Treating business employee size as a continuous variable with a squared-term yields consistent conclusions. Robust, clustered (by establishment standard error bars. Model F=32.77***, R2 =0.22. All total number of employee indicator variables are statistically significant at p < .05 (two-tailed tests) save for the 100 to 249 indicator variable.


How can the smallest companies offer a higher wage?

One explanation is that the smallest companies generate, on a size-adjusted basis, sufficient revenue to warrant a target wage premium. Looking into sales data for a selected sub-sample of Homebase customers, I can predict the ratio of a company’s monthly revenue to total number of employees — and find that the smallest companies enjoy a productivity advantage. They earn approximately $4,500 more per month per employee than companies with 20 to 49 employees (the baseline category for comparison). Whereas, the largest companies in the Homebase sample have the lowest sales to employee ratio.  

Source: Homebase hiring data (January 2021 – March 2022). Note: Results adjust for state, month, year, zip code and NAICS code. Treating business employee size as a continuous variable with a squared-term yields consistent conclusions, as does estimating a fractional logit model. Robust, clustered (by establishment standard error bars. Model F=45.25***, R2 =0.79. All total number of employee indicator variables are statistically significant at p < .05 (two-tailed tests) save for the 10 to 19 indicator variable. Excluding from analysis the companies with the greatest sales (e.g., 75th percentile or above) does not change results, nor does controlling for state or MSA as opposed to zip code. Largest firm category omitted due to sub-sample size considerations. 


Do all of the smallest companies offer a higher wage?

My analysis accounts for a host of factors that can explain a higher target wage, including job location, industry, and seasonality. However, there are instances where the smallest companies offer lower target wages than companies with 20 to 49 employees:

  • Food & drink: The smallest companies in this category pay approximately 4% less.
  • Roles with a target wage of $15 or less: The smallest companies in this category offer a wage deficit of approximately 3.9%.


Operational considerations

Researchers often define and measure “large” companies as those with greater than 10,000 workers, and “small” companies as those with 100 or fewer. However, there are considerable operational differences between companies with one to four employees and those with 20, 60, or 100 employees. 

Large businesses are often bureaucratic, formal, rigid, and standardized. They tend to be powerful and prestigious, and they have advantages that help them make organizing and operating more efficient and economical. Annual rankings of the best companies to work for are, without fail, lists of some of the largest companies in the country. So, not surprisingly, many of those ranked are also the companies new college graduates aspire and apply to work for.

The smallest businesses are often more collegial, familial, flexible, and authentic. These businesses were responsible for 16.2% of gross job gains in the United States in the second quarter of 2022 — and approximately 64% of job gains at all new firms (as most businesses start out small). On the other hand, most job losses at companies that are closing occur in the smallest of companies. 


For many of these very small companies, a job posting using Homebase hiring might be the first hire they make—or the first hire outside of the original circle of “friends and family” involved in the business. Furthermore, the very fact a company is hiring suggests that the company has (projected) demand for its products or services at a level the current employee base cannot comfortably meet. Such growing companies may not be typical of all very small businesses. 



Hiring is hard even in the best of times. But in a hot labor market like the US is currently experiencing, hiring can be frustrating and fruitless for all employers — especially, the smallest. Small companies do not have the same brand equity as large companies, which means they often must expend more time, effort, and money reaching — and then educating and convincing — prospective employees their small (but mighty!) businesses are a good place to work.

A higher target wage — made possible by a productivity edge — may put many of the smallest businesses in a better position to compete with larger employers for hourly workers. Of course, it’s important to also consider that employees’ needs and desires in work and a workplace are changing. As pay is only one factor candidates consider when comparing and evaluating competing offers, employers of all sizes must keep abreast of their evolving preferences to compete to attract — and even retain — today’s employees. 


Using Homebase hiring data, thousands of job posts from January 2021 – March 2022 were analyzed. These job posts are primarily for hourly work. Homebase hiring data offer an important analytical advantage as a high proportion of the job posts include the “target wage” offered for a specific job and period of time. (This allows for a cleaner assessment of how companies of varied sizes set wages without the confusion and confounding that can occur when a researcher can only observe accepted wages.) Analyses based on accepted wages can obscure the fact that job candidates with different preferences are attracted to different types (and sizes) of companies. Additionally, accepted wages can result from a negotiation between the job seeker and employer. Stronger candidates—and especially those with competing offers—will generally accept higher wages, all else equal. Focusing on the target wage set by a hiring employer before any possible negotiations is not subject to these same analytical complications.
Wage analysis: Target wage analysis accounts for location, year, month, year and month, industry, and most frequent job roles. Location was measured in several separate ways (e.g., state, MSA, city, zip code), and industry was measured at various levels of detail (e.g., NAICS code, coarse categories, specific categories (i.e., “sit-down restaurant”). Results remained consistent regardless of factors: Companies with the smallest (1-4) total number of employees were willing to pay prospective employees higher wages. For the smallest companies, the target wage premium was 10% more than companies with 20-49 total employees (the reference category). The smallest company wage premium was approximately 12.7% in the home and repair category. 
Robustness test: To ensure that employers in certain industries/roles that tend to organize and operate in smaller organizations were not skewing the results, job posts with hourly target wages greater than $30 were omitted. With this restriction, the size of the smallest organization wage premium remained large (approximately 6.4%) and highly statistically significant. (The largest firm wage premium is approximately 14.4% excluding these highest paying jobs.) Job posts with custom descriptions (one way of measuring “unusual cases”) offered target wage premiums of approximately 6% v. standardized roles, all else equal. This did not, however, explain the smallest company wage premium.


Exclusive: Small Businesses Are Facing Crippling Amounts of Paperwork. It'll Likely Only Get Worse –




Small Businesses Are Facing Crippling Amounts of Paperwork. It'll Likely Only Get Worse

#Small #Businesses #Facing #Crippling #Amounts #Paperwork #It039ll #Worse

If you think you are pushing more paperwork than ever, you’re not alone. According to a new Small Business Index report released this week from MetLife and U.S. Chamber of Commerce, 37 percent of business owners say they are spending more time on licensing, compliance, or other government requirements; that’s vs. 29 percent last quarter. 

The papers started piling up during the pandemic, as businesses started applying for funds through government relief programs such as the Paycheck Protection Program and employees starting requesting more sick leave due to Covid. While that seems reasonable enough, the time businesses are spending on forms and compliance is still likely to increase in the months ahead as federal agencies are seeking to implement more rules and enforce those already in effect.

In March the Securities and Exchange Commission (SEC), proposed rule changes that require registrants to include certain climate-related disclosures in their registration statements and quarterly reports, including information about climate-related risks. Small businesses say the regulator’s proposal on climate disclosures will saddle them with a compliance burden they won’t be able to handle, according to the Wall Street Journal. While small companies normally don’t fall within the SEC’s purview, they fear that they will be forced to cough up heaps of information on their roles, however small, in emitting carbon because the SEC wants large public companies to catalog emissions in their entire supply chains.

“Small and independent businesses cannot afford the experts, accountants and lawyers needed to comply with complex government reporting regimes,” the National Federation of Independent Business said in a comment letter filed with the SEC.

Additionally, the Federal Trade Commission (FTC), and the Consumer Financial Protection Bureau (CFPB) are creating more rules and regulations. In April Director Rohit Chopra told the Senate Committee on Banking, Housing, and Urban Affairs that the CFPB will “dramatically increase its issuance of guidance documents, such as advisory opinions, compliance bulletins, policy statements, and other publications,” to ensure businesses follow regulations. For small businesses without full HR staffs or legal teams to keep up with the added paperwork and unnecessary red tape and regulations, these changes can come as a harsh reality.

“[Small businesses] are wading through a seemingly never-ending debate of rule changes and shifting incentives that threaten their fundamental abilities to create, build, and grow the enterprises that will power our economy forward,” said Joe Shamess, General Partner at Flintlock Capital, during testimony before the House Small Business Committee in a hearing on veteran entrepreneurship in June 2022.

Meanwhile, a rare opportunity to overturn the federal government’s ability to police corporations is starting to materialize. Some regulations watchers suggest that the recent Supreme Court of the United States decision in which the Environmental Protection Agency was ruled to have overstepped its authority to curb power plants’ carbon emissions could fuel an easing of red tape in other instances. Similar cases involving the Clean Water Act, among others may follow similar precedent. 

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Exclusive: Bank of England's Bailey warns global economic outlook has 'deteriorated materially' –




Bank of England's Bailey warns global economic outlook has 'deteriorated materially'

#Bank #England039s #Bailey #warns #global #economic #outlook #039deteriorated #materially039

Andrew Bailey, governor of the Bank of England, has said the global economic outlook has deteriorated materially after surging commodity prices pushed up inflation around the world.

Bloomberg | Bloomberg | Getty Images

LONDON — The governor of the Bank of England said Tuesday that the global economic outlook has “deteriorated materially” and warned of possible further shocks to come.

Andrew Bailey blamed Russia’s invasion of Ukraine for piling further pressure on commodity prices and already rising inflation, and said that further resilience is needed to mitigate future risks.

“The global economic outlook has deteriorated materially,” Bailey said at a briefing at the Bank of England.

“It is the right time to lock in resilience so that we are well prepared for future possible shocks,” he added.

The warning came as the central bank published its Financial Stability Report Tuesday, in which it outlined a number of risks to the U.K.’s economic outlook. Those include ongoing disruption to food and energy markets as a result of the war, high household and government debt, as well as the continued impacts of Covid-19 in China.

We expect households and businesses to become more stretched over coming months.

Andrew Bailey


governor, Bank of England

The BOE, alongside other central banks, has been raising interest rates in a bid to bring down high prices. However, Bailey acknowledged that this had made the economic landscape harder for households and businesses, and that there was little sign of let up in the near-term.

“These higher prices, weaker growth and tighter financing conditions will make it harder for households and businesses to repay or refinance debt,” he said.

“Given this, we expect households and businesses to become more stretched over coming months. They will also be more vulnerable to further shocks,” he said.

BOE lifts banking capital demands

The comments came as the Bank on Tuesday lifted its countercyclical capital buffer rate (CCyB) for banks from 1% to 2%, starting in July 2023. Central banks increase the regulatory capital demand when they believe risks are building up.

Bailey said the Bank’s Financial Policy Committee would be willing to continue readjusting the rate as needed.

“Given considerable uncertainty around the outlook, the FPC will continue to monitor the situation,”  he said. “We stand ready to vary the UK CCyB rate — in either direction — depending on how risks develop.”

In sharp contrast to the financial crisis, it is in a position to cushion the economic shocks, not add to them.

Andrew Bailey

governor, Bank of England

Bailey also said the BOE would move ahead with its annual stress test in September, evaluating the U.K. banking system’s ability to handle various potential risks, including higher interest rates, asset price falls and “deep” recessions.

However, he added that the sector looks generally strong and that lenders are much better placed now than during the 2008 Global Financial Crisis to handle a severe economic downturn.


“The economic outlook is uncertain and undoubtedly a very challenging one for many households and businesses,” he said.

“The banking system is resilient to that outlook, however, or even a much worse one. In sharp contrast to the financial crisis, it is in a position to cushion the economic shocks, not add to them.”

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Exclusive: Twitter sues India’s government over content takedown orders –




Twitter sues India’s government over content takedown orders

#Twitter #sues #Indias #government #content #takedown #orders

Twitter has sued the Indian government to challenge some of its takedown orders, a source familiar with the matter told TechCrunch, further escalating the tension between the American social giant and New Delhi.

In its lawsuit, filed Tuesday in Karnataka High Court, Twitter alleges that New Delhi has abused its power by ordering it to remove several tweets from its platform.

The lawsuit follows a rough year and a half for Twitter in India, a key overseas market for the firm, where it has been asked to take down hundreds of accounts and tweets, many of which critics argue were objected because they denounced the Indian government’s policies and Prime Minister Narendra Modi.

Reuters first reported the lawsuit. A Twitter spokesperson declined to comment.

Twitter has partially complied with the requests, but sought to fight back many of the challenges. Under India’s new IT rules, which went into effect last year, Twitter has little to no room left to individually challenge the takedown orders.

The tension between the two was apparent on May 24 last year, when Delhi police, controlled by India’s central government, visited two offices of Twitter — in the national capital state of Delhi and Gurgaon, in the neighboring state of Haryana — to seek more information about Twitter’s rationale to label one of the tweets by ruling partly BJP spokesperson as “manipulated media.”

Delhi police said it had received a complaint about the classification of the spokesperson’s tweet and visited the offices to serve Twitter India’s head a notice of the inquiry. In a statement, the police said Twitter India’s managing director’s replies on the subject had been “very ambiguous.”

Twitter at the time described the episode as “intimidation.”


The company has “concerns with regards to the use of intimidation tactics by the police in response to enforcement of our global Terms of Service, as well as with core elements of the new IT Rules,” it said.

Twitter India managing director resigned from the firm last year.

Twitter is not the first tech giant to sue the Indian government. WhatsApp sued New Delhi last year, challenging new regulations that could allow authorities to make people’s private messages “traceable,” and conduct mass surveillance.

It’s unclear if the new lawsuit will have any impact on Twitter’s proposed acquisition by Elon Musk. Musk’s Tesla has been attempting to enter the Indian market for several years but wants the government to let it first sell and service imported cars first.

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