Small, Mid-Sized Businesses Optimistic, But Reluctant to Grow Headcount

July 8, 2013
Sage North America Reports Only a Quarter of Businesses With One to 500 Employees Plan to Increase the Size of Their Workforce in 2013

In the midst of continued economic uncertainty and rising business costs, many of America's small and mid-sized businesses are still gun shy about increasing their headcount, says a hiring outlook report from Sage North America. Sage is a provider of business management software and services to small and midsized businesses worldwide.

Only a quarter of businesses with one to 500 employees surveyed by Sage in May have increased or plan to increase the size of their workforce in 2013, and nearly half plan to keep it the same.

The results of the snapshot survey of hiring plans, conducted among 973 executives of small and midsized businesses in the U.S., appear to reflect the latest unemployment numbers from the U.S. Bureau of Labor Statistics. Employment did increase slightly in professional and business services, food services and drinking places, retail trade, and health care, many of which are small and midsized companies.

According to the survey, the hiring outlook is best in companies with more than 100 employees, with half planning to increase the size of their workforce this year. A third of companies with 20-99 employees plan to add to their workforce, and just 18% of companies with one to 19 employees plan to expand.

"Fortunately, layoffs are not in the works for most," says the report's author, Joe Langer, executive vice president of mid-market solutions. "Less than 10% of all small and medium businesses surveyed plan to decrease workforce size in 2013. Moreover, small and medium businesses that plan to hire will offer permanent positions, with 82% looking for full-time help and 29% seeking part-time employees. But, Langer concludes, "Until small and midsized businesses feel more confident about the future, hiring is likely to be slow. Economic uncertainty and the costs of doing business are making it more important than ever for small and midsized business manufacturers to streamline their operations and take advantage of technology and tools that help them run smarter, more cost-effective businesses. That may mean finding ways to cut costs, such as reducing fees, automating manual tasks where possible, and taking advantage of new technology that streamlines time-consuming functions such as payment processing, inventory management and accounting integration."

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