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Owners Are Not Hiring For More Than the Usual Reasons
When owners who are not looking for new employees were asked to evaluate eight potential reasons they are not doing so, overall business conditions headed the list as usual, including not needing new employees at this time (with 81% indicating this as a reason), worries that revenues or sales won’t justify adding more employees (74%), and worries about the current status of the U.S. economy (66%).
However, 61% of owners pointed to worries about the potential cost of healthcare, 56% to worries about new government regulations, and 55% to worries about cash flow or the ability to make payroll. Thirty-two percent point to it being hard to find qualified employees.
At the bottom of the list, but still at a surprisingly high level, 30% of owners say they are not hiring because they are worried they may no longer be in business in 12 months. This is up from 24% who had the same worry in January 2012.
The lack of improvement in small-business-owner self-reported net hiring over the past 12 months is consistent with January’s lack of year-over-year improvement in Gallup’s P2P (Payroll to Population) employment rate. Small businesses continue to hire fewer employees than they are letting go, while overall full-time U.S. employment is, at best, keeping up with the growth of the U.S. population. The lack of improvement in small-business hiring is also consistent with the estimated -0.1% annualized growth rate for fourth quarter GDP.
On the other hand, small-business owners’ net hiring intentions turned positive in January, consistent with the improvement in the quarterly Wells Fargo/Gallup Small Business Index. While owners suggest little improvement has taken place in the net hiring in the past, their hopes for future hiring have improved compared with where they were immediately after last year’s November elections.
Finally, the fact that so many owners say worries about such things as potential healthcare costs and potential new government regulations are holding back hiring is troublesome for the job market outlook. Still, probably the most worrisome response is that 30% of small business owners fear they may not be in business 12 months from now. This a bad sign not only for small-business hiring and capital investment, but also for the overall U.S. economy in 2013.
Are you paying attention, unemployed Obama voters? (Rhetorical question)