Wells Fargo/Gallup Survey Finds Small Business Confidence on Uptick
Following two years of pessimistic feelings among business owners, they report being more optimistic for 2013, according to the Wells Fargo/Gallup Small Business Index.
In fact, optimism improved 20 points to positive nine in January 2013, an increase from negative 11 in November 2012, the study finds.
Respondents report feeling more optimistic about revenues, capital spending and jobs over the past 12 months. In the upcoming 12 months, respondents say they are more optimistic about their overall financial situations, revenues, cash flow and jobs, Wells Fargo/Gallup report said.
Still, 71% of respondents do not anticipate work force changes in the next 12 months while only 17% of respondents plan to bring in more workers, which remains unchanged. Of the respondents that hired in the past 12 months, 35% say they are hiring fewer employees than they need, a jump from 29% in January 2012 but under the 42% of November 2010.
“At a time when news headlines report mixed economic news and uncertainty in Washington, our survey shows the volatility of business owner sentiment today,” said Doug Case, small business segment manager for Wells Fargo.
“Business owners are feeling a bit more positive at the beginning of the year, but they also express concern about the operating environment that could impact future business decisions, such as hiring new employees,” Case said.
Among the respondents’ reasons for not hiring are that they don’t need the extra staff at 81%, worries about sales and revenues at 74%, concerns about the U.S. economy at 66% and the potential health care cost at 61%. Thirty percent of respondents also say they are not hiring because their businesses could collapse in 12 months, up from 24% in 2012.
Meanwhile, respondents that are hiring say they are doing so because of increased consumer or business demand at 70%, and they are expanding business operations at 68%.
As respondents are looking for new employees, 63% say they rely on word of mouth while 47% use employee referrals. Another 23% of respondents say finding qualified employees is very difficult, and 30% say it is somewhat difficult.
These figures are about the same as in January 2012, the survey sponsors said. According to 27% of respondents, the difficulty of finding qualified employees has hurt their businesses in the last year, an increase from 21% last year.
When hiring, 40% of respondents report that they would consider temporary or contract workers, and 36% of respondents say they would look for part-time employees. Twenty-two percent of respondents say they are looking to hire full-time employees during the hiring process. If new employees are out of the budget, 28% of respondents say use unpaid help by their spouses at 28%, their children at 14%, friends at 13%, other relatives at 7% and students at 6%.
This article was originally posted at BenefitsPro.com, a sister site of Credit Union Times.