When you talk to your small business clients, are about half of them hiring? The other half aren’t? If you’re answering yes, then you’re seeing what we are across the country. According to our January 2014 SurePayroll Scorecard®, only half of small business owners expect to hire for new positions in 2014.
This leaves the small business economy – businesses with ten or less employees specifically – in an awkward position. When only half are hiring, it’s just not enough to get momentum going, and thus you have hiring staying flat or slightly down (it was down 0.1 percent in January). The average paycheck fell 0.2 percent month over month.
We were excited about the new year and small businesses were optimistic about 2014, but there still isn’t enough confidence in this economy to hire (65 percent of small business owners are optimistic about the economy).
According to our Scorecard survey, only 45 percent have extra cash flow on hand if a growth opportunity presents itself. Forty percent said they are not in debt, but don’t have extra cash, and 15 percent said they are operating with a debt.
On a positive note, 80 percent of small businesses expect to be profitable in 2014 barring any major downturns. Last year, only 60 percent expected profitability.
It’s certainly a plus that our small businesses are getting healthier financially. However, that’s just one of a set of criteria that needs to be there for hiring to take place. Small businesses are only halfway there.
In addition to financial stability, optimism needs to be high (preferably above 80 percent) and there needs to be qualified candidates to hire. We’re really not there yet on all three scores. It’s good to see small businesses doing well; however, to really drive the economy forward, all three of these criteria need to be in place.