Most Small Businesses Not Planning to Increase Hiring in 2013

RALEIGH, N.C., April, 2013 — With continuing uncertainty on the effects of ObamaCare and other tax and regulatory laws, many private businesses are not planning on increasing their staff sizes in 2013, according to a new Sageworks survey.

Sageworks, a financial information company, surveyed accounting professionals who work closely with these firms. More than 50 percent of respondents said that in the next 12 months their clients expect their staffing levels to remain largely unchanged. Twenty percent of respondents said their clients plan to increase their number of employees.

Also according to the survey, 6.5 percent of respondents believe their clients will reduce their number of employees in the coming months.

The most recent Private Company Report from Sageworks shows privately held companies have seen their sales grow by an average annual rate of 9.7 percent in the period ended February 2013. The average private company had a 7.6 percent net profit margin for the period, compared to 4.6 percent a year earlier.

“Private companies continue to grow at an impressive rate, most notably even in the construction industry. Unprecedented is their lack of hiring over this much time, however,” says Sageworks Chairman Brian Hamilton.

Although sales continue to grow and profit margins continue to expand, only 20 percent of private businesses are more likely to increase capital expenditures in the current economic situation according to the same Sageworks survey. Forty-two percent of respondents said that based on conversations with business clients they expect the companies to be less likely to increase capital spending at this time.

Sageworks conducted the online survey between March 8, 2013 and March 31, 2013, collecting responses from 277 accountants. The poll’s respondents were all clients of Sageworks and were not randomly selected.