Hiring Hurdles and Slow Sales Worry Small Biz Owners
Evidenced by the flat consumer spending data released yesterday, the economy is not in any hurry of making a full-fledged recovery. Despite a pickup in income for the month, consumers decided to increase their savings rather than spend with their new excess funds. Although that may make more sense from the financial viewpoint of the consumer if confidence in the economy is lacking, it in no way benefits small businesses that continue to deal struggle in the environment of depressed sales. Sluggish sales have in turn lowered the number of small business owners expecting to bring on new employees in the immediate future and may possibly lead to layoffs to recoup lost potential revenues and mitigate costs. It is a vicious cycle, weak sales hurt revenues which can cause layoffs creating more people with less income and therefore less inclined to make purchases again weakening sales further. BND expands, “While just 20 percent of small businesses report plans to add additional employees this year, new research shows those that are hiring face several hurdles.
The study by TD Bank found that more than 40 percent of small business owners who are trying to add new staff are having a hard time finding qualified candidates, while 20 percent are finding it difficult to come up with job offers that include competitive compensation packages. Despite 35 percent of small businesses being understaffed, just 21 percent plan to add at least one employee in the upcoming months. "Uncertainty about the future path of fiscal policy and the outlook for the global economy will keep businesses cautious about investing and hiring in the upcoming months," said Fred Graziano, head of Regional Commercial Banking, Government Banking and Small Business for TD Bank. The study found that declining sales is the biggest challenge facing small business owners over the next six months…”
Source - BND