First Quarter 2012 Hamilton Hiring Survey Indicates Employer Confidence is Growing

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The Hamilton Hiring Survey results for first quarter 2012 indicate that Iowa employers are more optimistic than they were last quarter.

The Hamilton Hiring Survey results for first quarter 2012 indicate that Iowa employers are more optimistic than they were last quarter.

Key Findings:

  •     47% of Iowa employers are somewhat or very optimistic re: job growth for the next quarter
  •     The majority of hiring will be entry- or mid-level positions
  •     Uncertainty is caused by worries re: our nation’s debt, healthcare costs/reform, government budget issues and business regulations
  •     Contract labor usage will trend upward
  •     9% of respondents plan to reduce their work force
  •     Pessimism was highest among smaller employers
  •     Employers are more optimistic, but expect employment growth to be slow

Analysis:

The Hamilton Hiring Survey results for the first quarter of 2012 indicate that Iowa employers’ optimism is moving higher than just three months ago.

The company asked 5,000+ small- and medium-sized employers about their sense of optimism for industry job growth during the next quarter. Results showed that 47% of the respondents were either somewhat, or very, optimistic.

This is up from 40% in the fourth quarter of 2011, returning optimism levels back to where they were in the third quarter. In the current survey, there is a noticeable uptick in the number of companies who were very optimistic about job growth in their industry.

“We are seeing a quarterly pattern with small- and medium-sized business optimism rising and falling with the news headlines,” Hamilton Group President and staffing expert Tom Hamilton said. “Overall optimism was up regardless of industry, which tells us that the economy and the geopolitical headlines play a major role in job optimism from quarter to quarter.”

Currently, the national unemployment rate is at 8.6%. According to Iowa Workforce Development, Iowa’s unemployment rate decreased from 6.1% in August to 5.7% in November. One year ago, the statewide rate was 6.2%.

However, only 36% of respondents said they expect to increase total employment over the next quarter. This modest increase in forecasted hiring is not large enough to dramatically reduce Iowa’s unemployment rate, so we expect the rate to continue to be between 5.5% and 6% in the first half of 2012.

Not everyone is ready to make a change, however. A relatively high number (29% vs. 35% in the Q4 survey) of respondents fell into the “neither optimistic nor pessimistic” category. This “wait and see approach” is affected by the many uncertainties facing businesses today. Respondent’s top four concerns included:

1.    Government budget uncertainties
2.    Business regulations and red tape in their industry
3.    Costs and uncertainties surrounding healthcare
4.    State and national debt levels

“Businesses are clearly taking a ‘wait and see’ approach because of these uncertainties,” Hamilton said. “Since many of these issues are geopolitical, they may not be resolved quickly. This could hold down job growth throughout 2012,” added Hamilton.

A trend that has been prevalent for the past several quarters continues to develop as more organizations use contract labor. “Many organizations feel the use of contract employees gives them flexibility during uncertain times. Many times, businesses will convert contract employees to full-time once they are confident about demand,” said Hamilton.

Optimism for job growth was scattered throughout the state and again was particularly high with businesses employing between 100 and 500 workers. Pessimism was also present throughout the state, the highest found within businesses employing between 5 and 100 workers.

The Hamilton Hiring Index for the first quarter of 2012 is now at 65*, a three point increase from the index of 62* for the fourth quarter of 2011.

About the survey:

The Hamilton Hiring Survey looks at employer confidence and hiring intentions for the upcoming quarter in the state of Iowa. The survey then results in an index number representing the overall hiring confidence for the next 90 days. The complete report and quarterly comparisons are available at http://www.HamiltonHiringSurvey.com.

Much of the employment data available today is trailing statistics. The Hamilton Hiring Survey is the only statewide staffing survey of small- and medium-sized businesses predicting future hiring trends.

The first quarter Hamilton Hiring survey was completed in mid-December of 2011 and reflects attitudes and intentions for January – March 2012.

*From the survey, a hiring index is calculated to indicate the level of optimism and hiring plans for the upcoming quarter. The Hamilton Hiring Index is based on a scale of 1-100. While 50 is considered neutral, a number above 50 indicates an expanding job market for small- and medium-sized businesses in Iowa. A number below 50 indicates a retracting job market for small- and medium-sized businesses in Iowa.

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Tim Hayes

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