Jobs numbers announced on February 3 were surprisingly good. More jobs were created than had been expected and the nominal unemployment rate dropped. Maybe we’ve turned a corner in the economy and can expect things to continue to improve. At least that seems to be the sentiment from the Wells Fargo/Gallup Small Business Index for the fourth quarter of 2011.
The Index shows:
- Small business hiring intentions are the best since 2008
- 22 percent expect to increase the total number of jobs in their companies over the next 12 months
But looking closer at the results of the Index, there are some disturbing finds:
- Only 26 percent of small business owners said they would hire full-time employees, compared with 72 percent who said they’d rather add temporary or contract workers (36 percent) or part-time workers (36 percent)
- 21 percent of owners said it is very difficult to find the qualified employees they need for their businesses; 32 percent said it was somewhat difficult to find qualified employees
Why these disturbing results? It doesn’t look like small businesses are doing any significant job creation. Small business traditionally has been responsible for 60 to 80 percent of all job growth, but in recent years it has been lagging in this regard and likely will continue to do so.
Maybe owners are still feeling shaky after the recession and don’t want to commit to full-time workers at this time. Maybe tax uncertainty, the potential costs of healthcare, and regulatory burdens continue to plague small business owners.
For a robust economy, we need to create about 2.5 million jobs each year (4 million were lost during the recession). But maybe we need to reexamine the jobs that are needed so people can be trained to do them. Manufacturing jobs likely will continue to decline over time (despite a recent uptick).
I’m not an economist; I’m a small business owner who speaks to other owners. The consensus is that the environment for hiring is still not good. But let’s remain hopeful!
Barbara Weltman is an attorney, author (with such titles as J.K. Lasser’s Small Business Taxes and The Complete Idiot's Guide to Starting a Home-Based Business), and trusted professional advocate for small businesses and entrepreneurs. She is also the publisher of Idea of the Day® and monthly e-newsletter Big Ideas for Small Business® at www.barbaraweltman.com, and host of Build Your Business radio. Follow her on Twitter: @BarbaraWeltman.