VOL. 41 | NO. 9 | Friday, March 03, 2017
Big thaw? Looks like small businesses ending hiring freeze
NEW YORK (AP) — The hiring freeze at small businesses looks like it's finally thawing.
Recruiting is picking up after being dormant at many companies even years after the recession. The factors behind companies' decisions to hire vary, with some anticipating a big revenue kick from the Trump administration's spending plans for defense and infrastructure. Other are responding to trends such as consumers' shift to online shopping, which means more jobs at internet retailers. And some hires are at companies whose customers are suffering from anxiety in the early days of the new administration.
The pickup in hiring was clear in a report Wednesday from payroll provider ADP, which said its small business customers added 104,000 jobs in February, following a January gain of 62,000. That compared to an average monthly increase of 33,000 from September through December. Hiring gains for all of 2016 averaged 60,000 a month after fluctuating from 2011 to 2015.
Small business owners had indicated their plans to expand. A survey by the advocacy group the National Small Business Association done in January showed 43 percent of owners expected to hire in the next 12 months, up significantly from 33 percent during the summer. Other surveys have also shown big increases in owners planning to bring on more workers.
It's a shift from the recession and its aftermath, when many owners were leery about the risks of hiring until they were certain of their revenue. Some owners said they'd keep asking their existing staffs to absorb any additional work.
Rob Basso is witnessing the change from two perspectives. As the owner of a company that provides human resources and payroll services to small businesses, he sees his 3,000 clients adding jobs — an average of one staffer per company in the last year with more hires planned. And because of rising demand from his clients, he's hired two people in the past few weeks, bringing Advantage Payroll Services' staff to 45. And he still has five open positions.
Basso's Freeport, New York-based company had its best January in terms of sales in 20 years.
"My clients are more willing to invest in the products and services I offer because they're more optimistic about how well their small businesses are," says Basso, who works with clients across the country.
A look at why some other businesses are hiring:
HIGHER GAS PRICES, POTENTIAL DEFENSE INCREASES
The rising price of gas and the prospect of increased defense spending are encouraging New Eagle to double its staff, including engineers and it support team, from 24 to 50 in the next 18 months.
The company's focus includes helping small businesses convert gas-powered vehicles to electric or hybrid power. When the price of gasoline began rising after Election Day, so did demand for the Ann Arbor, Michigan-based company's services, co-founder Financial Officer Mickey Swortzel says.
A gallon of gas averaged about $2.18 a gallon around Election Day; it's now $2.34.
Although the Trump administration opposes more stringent clean air standards, interest in electric or hybrid vehicles is still expected to increase, Swortzel says.
"Consumers are demanding it," she says, noting that pollution is a problem in places like California, Europe and China, where New Eagle has customers.
New Eagle also expects more business from the Pentagon, which has invested in clean energy equipment to reduce its fuel needs, including in combat areas.
"The government's military spending has opened up additional contracts, which we believe will continue to grow under the Trump administration," Swortzel says.
RIDING THE ONLINE SHOPPING WAVE
As consumers shop more on the internet, many small online retailers expect sales to grow — and some are hiring to be sure they have enough workers. The trend was clear from the holiday season; the Commerce Department said online and mail order sales rose nearly 11 percent in December from a year earlier, more than double the gain in overall retail sales.
StoreYourBoard.com, which sells products like racks, carts and wall mounts for storing skateboards, snowboards, skis, kayaks and other items, had a 50 percent revenue increase last year from 2015, and is hoping to repeat that performance this year. It plans to hire at least four workers in 2017, adding to its staff of six, says Andrew Mavraganis, a vice president at the Charlottesville, Virginia-based company. The first new hire started Wednesday.
The company decided not to wait until a further sales increase happens; it doesn't want to scramble to find help, Mavraganis says.
"We're open to adding great candidates whenever we come across them," he says.
STRESS IS UP, SO'S HIRING
Business surged at Rachel Beider's two massage businesses in New York's borough of Brooklyn after President Donald Trump's inauguration, with revenue rising 50 percent that first week. Bookings have remained high and Beider, who has a total of 46 part-time massage therapists at Massage Williamsburg and Massage Greenpoint, needs four more to keep up. She's also hired a full-time receptionist.
Clients stressed about the political climate are making appointments in hopes that a massage will help them feel better, Beider says.
"Their anxiety is taking a physical toll on their health, manifesting as shoulder tension, neck pain, headaches, insomnia and jaw pain," Beider says.
Beider was surprised by the increase in her business.
"I wasn't expecting the volume or frequency of appointments — people are making more visits," she says.
FIGHTING BURNOUT, LOOKING FOR GROWTH
Business has been growing 80 percent annually at Eco Branding, a marketing firm whose clients include companies involved in clean energy and information technology for cities. CEO Jake Rozmaryn expects revenue to keep rising even with a Republican-led government in Washington, and so it's time to bring in more staffers to lighten the workload for everyone. The company has seven full-time employees including two recent hires, and is looking for one more.
"We'd rather have a group of happy and healthy employees that have a great work-life balance than a group of stressed and overworked employees that will get burned out after a year and leave," says Rozmaryn, whose company is based in Washington, D.C.
Rozmaryn is optimistic about Trump's call in his recent speech to Congress for $1 trillion in public and private spending on infrastructure. Spending on roads, bridges and other public works could mean more business for both the industries Eco Branding serves.
"This can help our clients in a big way, and of course, our hiring," he says.
Follow Joyce Rosenberg at www.twitter.com/JoyceMRosenberg . Her work can be found here: http://bigstory.ap.org/content/joyce-m-rosenberg