New Survey Shows Small Business Less Willing To Hire Today Than in 2009, Putting Jobs and Recovery at Risk
Weak economy and no benefits from government stimulus bill forcing small business owners to be risk-averse towards hiring and capital expenditures.
Online, February 1, 2010 (Newswire.com) - According to a new survey by Angrisani Turnarounds, LLC with data provided by Toluna, Inc., 80 percent of small business owners surveyed said they plan to hold off hiring new full-time employees for the foreseeable future, while 63 percent are delaying major capital equipment purchases. Additionally, a full 91 percent of respondents said they've seen no benefit from the federal Economic Stimulus bill. The Small Business Sentiment Survey (SBSS) targeted small businesses and sole proprietors across the country and in a variety of industries.
While these figures seem negative enough in their own right, there is worse news yet. Based on data from an earlier Angrisani Turnaround/Toluna survey, the newest numbers indicate a worsening trend. In October 2009, 52 percent of SBSS respondents said they were disinclined to hire new full-time employees, while 80 percent said they'd seen no benefit from the Stimulus Bill. On one positive note, 53 percent of respondents said that, if given the chance, they would start their businesses again.
An Epidemic of Risk-Aversion
According to Al Angrisani, CEO and founder of Angrisani Turnarounds and a former U.S. Assistant Secretary of Labor under President Reagan, this trend indicates a pandemic of risk-aversion among small business owners which, if gone unchecked, could threaten the fragile economic recovery.
"A psychology of risk-aversion threatens to grip small business owners, the engine of job growth, largely due to concerns over the weak economic recovery and no obvious flow-through benefits from the government stimulus bill," Angrisani says. "In the January 19 Bloomberg quarterly poll of investors, 77 percent gave the current administration an anti-business label. I believe that same thinking is finding its way into the psyche of small business owners, making them more concerned about surviving than expanding their businesses. That spells trouble for the economy."
So, while America's largest corporations are making record profits and the stock market inches toward 11,000, small businesses are disconnected from the recovery. To a degree, this explains today's jobless recovery. According to the Small Business Administration, small businesses (companies with less than 500 employees) supply just over half of the country's private-sector workforce and represent 99.7 percent of all employer firms.
Reversing the Trend
Angrisani says that small business owners and sole proprietors need to see both tangible and psychological support coming their way from Washington before the risk-aversion trend line will move in the opposite direction.
"I think we need to see a massive tax cut aimed at small business owners with less than 500 employees. When the Reagan Administration took exactly that step as part of an overall business recovery package, during the last great recession in 1980, we created 16 million new jobs," he notes. "I also think the Administration should appoint a national expert on small business to the president's inner circle of economic advisors. Finally, I believe that President Obama should announce a commitment to pro-growth business polices to begin reversing the belief in the minds of the business community and investors that Washington is anti-business."
About the Small Business Sentiment Survey
Angrisani Turnarounds, LLC, commissioned Toluna, Inc., to conduct an online survey of small business owners. The survey, which used a representative sample of 200 owners of businesses with less than 100 employees from various industries and regions, was designed to assess the mood of small business owners. It also asked them to rate those issues presenting the greatest risk to their businesses and their general feeling about the health of their businesses.
About Toluna
Toluna, Inc., is the world's largest online research panel and survey technology provider. It provides sample and custom panel building expertise to over 1,500 of the world's leading market research agencies from offices across Europe, North America and Asia Pacific.
Toluna has built and manages a panel community of over 4.3 million active members across 33 countries. This has been extensively profiled into 16 specialist panels, reaching niche segments to provide premium quality survey research data.
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