The improvement seen in the economy over the last several years has come to small businesses in particular somewhat slowly, but there has been an amelioration of many bottom lines that were hurt badly during the recession. However, even those small steps forward leave problematic situations for owners, and as a result a large number say they still have no plans to significantly increase hiring.
Today, only 3 in 10 small business owners say they plan to hire in the next three to six months, according to the latest Small Business Authority Market Sentiment Survey from Newtek Business Services. This could serve as a major impediment for many companies not only when it comes to growth for many such companies, but also with respect to what could be the entire U.S. economy.
“Our May survey depicts a lack of intention in our small business clientele to hire over the next two quarters and that the trend of a jobless economic recovery may continue,” said Barry Sloane, chairman, president and CEO of the Small Business Authority. “Although we have seen the United States unemployment rate fall from about 10 percent to 6.3 percent, the historic measurement of employment trends in the U.S. has proven to be misleading. The labor department’s U-6 measure, currently at 12.3 percent, which essentially identifies the amount of workers that are eligible to work but are not working, including people who have left the labor force, is a more useful measure. In order for the economy to recover there need to be more workers in the total population that are earning a wage and who can be clients of small businesses. Once this begins, we anticipate the small business economy picking up.”
One potential good sign
However, it appears as though at least part of the problem with hiring is the amount it will cost companies to find affordable candidates, and as such many owners seem to be turning to those who have recently joined the workforce in earnest for the first time, the report said. In all, 51 percent of small businesses hire job candidates who have recently graduated from college, and these workers often have lower salaries, which could be good for smaller businesses in general.
Owners who are trying to keep their expenses as low as possible might also want to consider the ways in which finding more affordable small business insurance, such as coverage for general liability insurance. Doing so can save thousands annually.