Second Quarter Hamilton Hiring Survey: 55% of Iowa Small and Medium-Sized Businesses Are More Optimistic About Hiring

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The Hamilton Hiring Survey results for second quarter 2012 indicate that Iowa small- and medium-sized employers’ see promising job growth.

How would you rate your sense of optimism for overall job growth in your industry for the next three months?

We are seeing small- and medium-sized business hiring optimism rising across most industries and geography in the state,” Hamilton Group President and staffing expert, Tom Hamilton said.

Key Findings:

  •     55% of Iowa employers were either somewhat or very optimistic re: job growth for the next quarter
  •     More mid-level hiring will lead to increased payrolls
  •     9% of new jobs will be at a senior level
  •     3% of respondents plan to reduce their work force – the lowest level in four quarters
  •     Pessimism was highest among smaller employers

The Hamilton Hiring Survey results for the second quarter of 2012 indicate that Iowa employers’ optimism continues to improve.

The company asked 5,000+ small- and medium-sized employers about their sense of optimism for industry job growth in the next quarter. Results showed that 55% of the respondents were either somewhat or very optimistic.

This is up from 47% in the first quarter of 2012, and is at its highest point in the last year. “We are seeing small- and medium-sized business hiring optimism rising across most industries and geography in the state,” Hamilton Group President and staffing expert, Tom Hamilton said. “This is a positive sign that job growth is building momentum into the second quarter.”

According to the Bureau of Labor Statistics, the national unemployment rate was at 8.3% in January. According to Iowa Workforce Development, Iowa's unemployment rate decreased to 5.4% in January, down from 5.6% in December. One year ago, Iowa’s unemployment rate stood at 6.1%.

In this quarter’s Hamilton Hiring Survey, 47% of respondents said they expect to increase total employment over the next quarter. A recent increase in profits and the need to add staff to meet customer demand are the main reasons businesses are planning to hire. “The worst of the economic downturn is certainly behind us and we continue to see improvements in many sectors. Sustainable, conservative growth will better serve our community interests for the long term. We are selectively and strategically adding key positions for expected improvement in commercial and consumer business,” said Mike Helak of US Bank.

However, the increase may not be a large enough increase to significantly reduce Iowa’s unemployment rate. We would expect the rate to remain between 5.3% and 5.7% into the third quarter of 2012.

Respondents indicated they would hire more mid-level positions than in any survey in the last year. Mid-level jobs typically pay higher wages than entry-level positions, which could signal coming payroll growth.

However, not everyone is ready to make a change. A relatively high number (33% vs. 29% in the first quarter) of respondents fell into the “neither optimistic nor pessimistic about their business prospects” category. While 50% indicated there would be no change in their workforce or were undecided about future hiring. “There are a very large number of employers who are still on the sidelines. This ‘wait and see’ approach is affected by the many uncertainties facing businesses today,” added Hamilton. Respondent’s top four concerns included:

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

Even though planned layoffs are at their lowest point in a year, businesses have indicated that uncertainties remain and have an impact on their hiring decisions. One hiring authority summed it up this way, “This is an unusual year, which is requiring us to take a ‘wait and see’ approach. Healthcare changes are one of our biggest concerns and could have a significant impact on our operations moving forward.”

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 second quarter of 2012 is now at 69*, a four point increase from the index of 65* for the first quarter of 2012, and up from 62* in 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.

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 second quarter Hamilton Hiring Survey was completed in mid-March of 2012 and reflects attitudes and intentions for April – June 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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