Why Won’t They Hire?

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While small business owners’ optimism has been on the rise for the last five months, hiring has been either flat or slightly down. The obvious question is why aren’t we seeing more hiring?

The economy seems to be improving in some respects, but for the small businesses we survey in our SurePayroll Small Business Scorecard®, most of which have 10 or less employees, they haven’t experienced enough demand to add new employees.

There are three things we probably need to see before the tide turns:

  • More new businesses – An increase in startups would almost certainly mean new jobs. According to our survey, 50 percent hire their first employee immediately upon starting a new business.
  • Increase demand – So far in this jobless recovery, it seems small businesses have grown mostly through efficiency and increased productivity. They need demand from consumers and other businesses to really go into high gear to justify the costs of hiring.
  • Housing market continues to improve – New homes mean the need for the manpower to build, paint and decorate them.

The reality is we’re probably a ways off from seeing all three fall into place, but I’m hopeful we will see a full recovery in 6-12 months.

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I am hopeful as well! The economy is slowly making a comeback, not as fast as we all would hope, but we can be optimistic.