Following two years of pessimistic feelings among business owners, they report being more optimistic for 2013, according to the Wells Fargo/Gallup Small Business Index.
In fact, optimism improved 20 points to positive nine in January 2013, an increase from negative 11 in November 2012, the study finds. Respondents report feeling more optimistic about revenues, capital spending and jobs over the past 12 months. In the upcoming 12 months, respondents say they are more optimistic about their overall financial situations, revenues, cash flow and jobs.
Still, 71 percent of respondents do not anticipate work force changes in the next 12 months while only 17 percent of respondents plan to bring in more workers, which remains unchanged. Of the respondents that hired in the past 12 months, 35 percent say they are hiring fewer employees than they need, a jump from 29 percent in January 2012 but under 42 percent of November 2010.
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"At a time when news headlines report mixed economic news and uncertainty in Washington, our survey shows the volatility of business owner sentiment today," says Doug Case, small business segment manager for Wells Fargo. "Business owners are feeling a bit more positive at the beginning of the year, but they also express concern about the operating environment that could impact future business decisions, such as hiring new employees."
Among the respondents are not hiring are they don't need the extra staff at 81 percent, worries about sales and revenues at 74 percent, concerns about the U.S. economy at 66 percent and the potential health care cost at 61 percent. Thirty percent of respondents also say they are not hiring because their businesses could collapse in 12 months, up from 24 percent in 2012.
Meanwhile, respondents that are hiring say they are doing so because of increased consumer or business demand at 70 percent, and they are expanding business operations at 68 percent.
As respondents are looking for new employees, 63 percent say they rely on word of mouth while 47 percent use employee referrals. Another 23 percent of respondents say finding qualified employees is very difficult, and 30 percent say it is somewhat difficult. These figures are about the same as in January 2012. According to 27 percent of respondents, the difficulty of finding qualified employees has hurt their businesses in the last year, an increase from 21 percent last year.
When hiring, 40 percent of respondents report that they would consider temporary or contract workers, and 36 percent of respondents say they would look for part-time employees. Twenty-two percent of respondents say they are looking to hire full-time employees during the hiring process. If new employees are out of the budget, 28 percent of respondents say use unpaid help by their spouses at 28 percent, their children at 14 percent, friends at 13 percent, other relatives at 7 percent and students at 6 percent.
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