Employers indicated they were planning layoffs for the first time in several years. There is also a growing trend showing respondents plan to purchase new technology in lieu of hiring more staff.
Des Moines, IA (PRWEB) December 05, 2012
The Hamilton Hiring Survey results for first half of 2013, conducted days after the November 2012 election, indicates that Iowa employers are far less optimistic than they were earlier in the year.
1. Optimism for 2013 hiring falls significantly; 52% of respondents now pessimistic
2. New layoffs are expected
3. Hiring Authorities are very cautious – Healthcare, red tape and fiscal cliff are the culprits
4. “Wait and see” attitude at unprecedented levels
The company surveyed 5,000+ small and medium-sized employers about their sense of optimism for industry job growth in the first half of 2013. Results showed that only 24% of the respondents were either somewhat or very optimistic. This is down 30 percentage points from the 3rd quarter of 2012.
“Business’s optimism for the first half of 2013 has fallen significantly” Hamilton Group President and staffing expert Tom Hamilton said. “Over half of the respondents said they were somewhat or very pessimistic, the highest level in the past 3 years. Businesses have major concerns, and these concerns are not a good sign for job creation in 2013,” added Hamilton.
Only 25% (down from 44% in the previous survey) of respondents said they expect to increase total employment over the next six months. Fewer business’s indicated plans to introduce new products/services and target new markets; “This is a troubling trend showing businesses are limiting growth plans and will not be creating new jobs,” said Hamilton.
“We have clearly seen a significant change of respondent’s hiring plans from 44% earlier last summer citing “no change”, to only 33% today. The majority of those who moved out of the undecided category are moving to reduce their workforce”. In other words, many of those who were sitting on the fence have decided to reduce hiring” said Hamilton. This was driven by respondent’s top three concerns:
1. Costs and uncertainties surrounding healthcare
2. Business regulations and red tape in their industry
3. The approaching “fiscal cliff” on Jan 1, 2013
Bill Tubbs, Publisher of the North Scott Press in Eldridge, IA. commented "We are generally optimistic, but concerned about the divisions in the country. Our leaders can send a strong signal if they would set partisan differences aside and come together to solve problems."
The percentage of Iowa companies who plan to reduce their workforce was 20%, up from only 1% last summer. “Employers indicated they were planning layoffs for the first time in several years. There is also a growing trend showing respondents plan to purchase new technology in lieu of hiring more staff,” added Hamilton.
Rich Carlson, CEO of First National Bank in Cedar Falls, IA said "The future for community banks like ours will be very challenging. We are faced with a dramatically higher level of new regulations, a low interest rate environment, and uncertainty over taxes and healthcare."
A trend that has been prevalent in previous quarters was the use contract labor. And it appears that the desire to add contract labor is increasing. “Many organizations feel the use of contract employees gives them flexibility during uncertain times. Their responses indicated they will be looking at contract labor to fill positions that may have previously been full time employees,” said Hamilton.
The survey concluded that employers have had a dramatic shift in optimism since the November elections. The sense of many businesses is that they are searching for the ideal staffing level until economic and political uncertainties become more clear.
“I am hopeful that the legislature and the President can provide businesses with a pro-growth tax policy and a debt reduction strategy that will alleviate businesses concerns. I am optimistic that if Washington will pass pro growth legislation with clarity for the future, then hiring optimism can return to Iowa’s employers,” said Hamilton.
The semi annual Hamilton Hiring Index for the first half of 2013 is now at 51*, a fourteen point decrease from the index of 65* in the 3rd quarter of 2012.
About the survey:
The Hamilton Hiring Survey looks at employer confidence and hiring intentions in the state of Iowa. The survey results in an index number representing the overall hiring confidence for the next 180 days.
The semi annual Hamilton Hiring survey was completed in late November 2012 and reflects attitudes and intentions for January – June 2013.
*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.