The Intuit Small Business Employment Index is a set of four related measures all tracking relevant changes in national small business employment data. Each has been adjusted for seasonality and trend and is based on a set of approximately more than 57,000 employers. Unlike survey data, the Intuit Online Payroll data is electronically generated from payroll records in near real-time.

The Small Business Employment Index is the flagship index, as it provides a top-level view of change in employment at small businesses. It also measures small business employment by geography. The other two measures shed light into other aspects of small business employment: monthly hours worked and monthly total compensation per employee. Together, they give a rich view of small business employment activity on a monthly basis.

• Small Business Employment Index represents the monthly level of employment in small businesses.
• Small Business Employment by Geography represents the monthly level of employment by U.S. Census Divisions and for individual states in which there are more than 1,000 small firms represented.
• Small Business Employee Hours Worked represents the level in monthly hours worked per employee (utilization) in small businesses.
• Small Business Employee Hours Compensation represents the monthly levels of compensation per employee in small business.

According to the U.S. Bureau of Labor Statistics¹, small businesses with fewer than 20 employees continue to be the largest set of employers. They make up 87 percent of all U.S. employer firms and employ about 18 percent of all persons employed, which is nearly 20 million people. It's therefore clear that these smallest of small businesses have a large impact on the economy. However, details on small business employment are reported only quarterly and annually. The U.S. Bureau of Labor Statistics monthly employment survey (reported as the National Employment Situation Report) does not break out statistics specific to small businesses, and is dependent on surveys filled out by hand and reported by phone.

To fill the gap in a lack of timely small business employment reporting, we created the Intuit Small Business Employment Index. It is designed to provide statistically-sound insight into small business employment trends and behavior and show how these small businesses play a key role in the economy that is different in interesting ways from that of larger businesses. Because the Index is created with online payroll data, the Index is available close to real-time at the beginning of each month, faster than most other employment indices.

"We believe that it's important to understand what's happening with employment on a month-to-month basis among the smallest of small businesses. This insight gives us a more complete picture of the health of our overall economy and is often critical when understanding specific labor trends," said Nora Denzel, senior vice president and general manager of Intuit's Employee Management Solutions division.

"When we started exploring the data currently available, we were surprised to find that few other companies that had data on small businesses analyze it to provide current, monthly insight about the small business economy. The Intuit Small Business Employment Index is constructed from electronic and thus pristine payroll data to show what is happening in the national small business economy. As leaders in small business payroll, with an understanding of the nuances in small business employment, we believed it important to step in and fill that gap," continued Denzel.

The Intuit Small Business Employment Index is constructed from data coming entirely from small businesses. We report not just employment, but monthly hours worked and compensation. The BLS reports national employment monthly, but does not break out employment for small businesses.

Also, the Intuit Small Business Employment Index is a roll-up of electronic payroll data, whereas BLS depends on surveys that are filled out by hand and returned by mail or reported by phone.

We believe it's important to give a detailed perspective about the overall employment picture, and the combination of employment along with hours worked and compensation help provide that. For example, in talking with small businesses, we know they want to try to keep great employees through tough economic times. One way to do this is to reduce hours. The three views presented in the Intuit Small Business Employment Index help provide insight into those behaviors.

The 2011 calendar is shown below. Each release will represent a full month of data, through the 23rd of the previous month, pulled on the 24th.

The Intuit Small Business Employment Index is based on a set of approximately more than 57,000 employers; the BLS surveys 160,000 businesses -- the Intuit Index is roughly one third the size of the federal survey sample. A key difference between the two reports is that the Intuit Index is not a survey and based on real-time electronic payroll data.

By U.S. Census Division:

This data reflects the change in small business employment across the U.S. according to the U.S. Census Divisions. It's based on aggregate and anonymous payroll data from approximately more than 57,000 small business employers who use Intuit Online Payroll. The month-to-month changes are seasonally-adjusted and informative about the overall economy

By State:

This measure data shows the change in small business employment for the states in which Intuit Online Payroll has more than 1,000 small business firms represented. The month–to–month changes are seasonally–adjusted and informative about the overall economy

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Intuit Payroll serves more than 1 million small business employers with both desktop and online payroll services. The Index is based on a sample size of approximately more than 57,000 employers who use Intuit Online Payroll. This is not the total number of Intuit Online Payroll users.

The data is pulled in aggregate from approximately more than 57,000 Intuit Online Payroll small business users. Since the number is provided in aggregate form only, it is not possible to use the Index to determine a specific small business' payroll data.

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The Intuit Small Business Employment Index is focused exclusively on small business employers defined as businesses with fewer than 20 employees. The ADP monthly report is based on its customer base, which includes numerous, very large businesses, and breaks out small businesses as fewer than 50 employees. The Intuit Small Business Employment Index is designed to provide a detailed look into the economic trends and behavior of the fewer than 20 employee segment. We believe that these small businesses play a key role in the economy that is different in interesting ways from that of large firms.

No. The percentage changes in employment reflect the conditions of the economy, and do not represent changes in Intuit's base of Payroll customers or Intuit's business results for any period. The Small Business Employment Index data is constructed to reflect employment activity in small businesses, after controlling for the changes in the composition of the Intuit Online Payroll customer base. The percent change is measured monthly using the change in employment for existing Intuit Online Payroll customers from one month to the next. The set of customers changes each month so the measurement is the change, for each pair of months, for customers who are present in both the earlier and the later month.