Two-thirds of small and medium-size companies say they plan to hire new employees this year, an HR survey shows.
And 53% of the companies say they expect strong or moderate economic growth this year, the survey released by HR-outsourcing provider TriNet found. None of the responding businesses expected a strong decline in the economy.
The results may turn out to be evidence that small businesses are once again proving to be economic bellwethers, fueling indications that the worst of the nation's economic woes are behind it.
Other indicators that America is heading toward employment stability in this sector include findings that nearly 70% of small businesses added staff in 2009, while their larger counterparts were laying off hundreds of thousands of employees. Of this, the largest percentage (33%) hired more than five new employees last year - pointing toward resurgence in employment and growth.
These latest findings are a significant improvement over the small-business perspectives gathered a year earlier for the 2009 economic outlook, when only 30% of responding companies expected growth.
"The United States economic recovery will come on the backs of small business, not the big corporations," said Burton M. Goldfield, TriNet's president and CEO. "The results in this survey show that entrepreneurs are more confident, prepared for a turnaround and ready to make opportunistic hires when the time is right."
Regarding hiring, two-thirds (65%) of the respondents think it will be easier to recruit because the softened job market has made more talent available. Conversely, 21% said too many applicants for open positions make recruitment more challenging, and 14% think new talent will be less affordable because of rising healthcare costs and increased regulations.
The majority of respondents also indicate a strong compensation package and their company's culture/reputation are "very important" to their ability to hire - two factors that year-over-year have been considered more important to attracting personnel than flexibility and work/life balance, advancement opportunities and employee benefits.
"The hottest issue this year will be compensation practices and the return of the raise," Goldfield added. "As the labor market warms, firms will realize they need to boost their salary budgets and engage key talent or risk losing them to competitors."
The quarterly survey of about 225 U.S. small and medium-size businesses was conducted for TriNet. The survey was fielded to executives of small and medium-size businesses in the industries of technology, financial and professional services industries, including manufacturing, architecture and engineering. About 57% percent of respondents employ 25 or fewer employees, and 14% employ more than 100 people. The quarterly HR trends report is being made available in its entirety at www.TriNet.com.