Survey: National Debt Impacting Hiring Plans

The US debt is weighing on business owners as they consider adding workers and making other investments, according to a new survey by Sageworks, a financial information company. In the survey, accounting and banking professionals were asked how the national debt affects businesses' hiring and investment plans. 

Less Likely to Hire 
Seventy-four percent of respondents said the national debt would make it "less likely" that businesses would increase hiring. Twenty percent said the debt has no impact on hiring plans, while 2 percent said the debt makes it more likely that businesses will increase hiring.
Sageworks CEO Brian Hamilton explained that this reaction from business owners is natural. "Businesses understand that the national debt is bound to result eventually in an increase in the cost of their own borrowing," Hamilton said. "Why would they want to take on additional employees, equipment, and infrastructure on our current debt load?"
Additionally, only 13 percent of respondents thought that their business clients would increase hiring in 2013, while 55 percent expected businesses to maintain their number of employees. The national debt coupled with a slowdown in private company sales growth seems to have created an uncertain hiring environment in 2013: "If companies weren't hiring when sales growth was strong," Hamilton asked, "what will they do now that sales are slowing down?"
Less Likely to Invest
Nearly three-quarters, or 73 percent, of respondents also said the national debt would make it "less likely" for business owners to boost other investments in their company. About 1 in 6 respondents said the debt has no impact on businesses' investment plans.
Sageworks COO Nicole Wolfgang explained that smaller businesses, in particular, may be sensitive to concerns about the national debt because they may lack the rainy-day resources and cash reserves that a larger company may have available to ride out tough times. "It's more of a general unease or a subtle sense that you want to be careful," Wolfgang said. "You're not quite sure what's coming at you." 
About the survey:
Sageworks conducted the online survey between October 23 and October 29, 2012, collecting 150 responses from financial professionals. The poll's respondents were all Sageworks customers who volunteered to answer the survey and were not randomly selected.
Related articles:
Source: October 31, 2012, Sageworks Press Release

You may like these other stories...

Majority of House of Representatives urges leadership to preserve cash method of accounting for tax purposesA bipartisan majority of the House of Representatives – 233 members – has signed a letter urging House...
Munger defends Buffett’s dealCharles Munger defended recent decisions by his business partner, Berkshire Hathaway Inc. Chairman Warren Buffett, and predicted that Berkshire would grow robustly, Jason Zweig of the Wall...
Tax friendly trusts swell under new rulesUS companies are latching onto an obscure real estate provision to avoid corporate taxes, widely adopting a financial maneuver that has been expanded under the Obama administration,...

Already a member? log in here.

Upcoming CPE Webinars

Sep 18
In this course, Amber Setter will shine the light on different types of leadership behavior- an integral part of everyone's career.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.