AICPA Economic Outlook Survey: CPA Execs More Optimistic about Hiring
by Terri Eyden on
The number of companies with too few employees who plan to hire increased from 12 percent in the first and second quarters to 15 percent in the third quarter – a post-recession high for this measure, according to the AICPA.
"An increase to 15 percent from 9 percent a year ago and from 12 percent three months ago is pretty significant," Morrison said. "It shows that executives are now willing to go out on a limb and commit to some hiring, which is good news."
Slightly more than half of all companies (53 percent) continue to say they have the right number of employees, and only 11 percent report they have too many. The number of companies that say they have too few employees but are hesitating to hire remained at 19 percent.
Despite a decline in overall optimism this quarter, improvement in the rate of hiring is expected by the technology (2.1 percent to 2.6 percent) and professional services (1.6 percent to 1.9 percent) industries. The construction industry expects to continue at the same hiring rate of 2.1 percent.
In spite of the retail trade segment leading in terms of consumer spending optimism (62 percent), its expected rate of hiring declined from 2.1 percent in the second quarter to 1.8 percent in the third quarter.
On the flipside, a full percentage-point improvement in hiring rates is expected by both wholesale trade (0.5 percent to 1.5 percent) and the real estate and property (0.6 percent to 1.6 percent) segments. The finance and insurance sector expects to continue expanding headcount at a 1.2 percent rate, while manufacturing is expecting to ease off slightly from 1.2 percent to 1 percent. Both health care providers and health care-other companies expect hiring to be in the 0.5 percent range.
Morrison said one factor that might be driving an increase in hiring for the third quarter is the improved outlook for organizations' growth and expansion.
"It results in the need for more headcounts," he added.
Sixty-eight percent of companies with $1 billion or more in annual revenues have plans to expand in the third quarter of this year, followed by 64 percent of companies with revenues of between $100 million and $1 billion, 61 percent of companies with revenues between $10 million and $100 million, and 56 percent of companies with under $10 million in annual revenues.
While there continue to be more billion-dollar companies that are reluctant to hire (24 percent) than companies in the other categories, those businesses also have plans to hire (19 percent in the third quarter versus 15 percent in the second quarter). Companies with revenues under $10 million are also more inclined to hire than they have been, as shown by an increase from 9 percent in the second quarter to 16 percent in the third quarter. The businesses in that category that are reluctant to hire dropped from 25 percent last quarter to 20 percent this quarter.
"We have seen expectations on hiring and business expansion gain steadily throughout the year," Arleen Thomas, CPA, CGMA, senior vice president of management accounting and global markets for the AICPA, said in a written statement. "Our latest survey results support that, but also show some renewed concern about prospects for the US economy."