Current reports indicate economic growth in the 3rd and 4th quarters and continuing improvements as we move into 2010. However, despite some early optimistic views of 2010, current research clearly shows that small and medium sized businesses, are taking a “wait and see” approach when making strategic decisions regarding expansion, hiring and other business expenses.
The Bad News
Lagging economic indicators like employment rates are still dismal. National unemployment rates are over 10% (in California it is 12.3%) and the Federal government has created great uncertainty with continuous discussion of health reforms, interest rates, and small business lending. This turbulence directly affects many companies’ management who require stable market conditions to make intelligent business decisions. The overall sentiment is that the recession is not quite over and pessimism prevails among many small business owners.
Looking at the Bright Side
On the other hand, the Labor Department said in early December that although employers continued to shed jobs in November, they only cut payrolls by 11,000 jobs, the fewest since the recession began in December 2007. The department also said the average workweek rose and the temporary-help sector expanded for the fourth month. Aside from the silver lining in the slowing tide of job losses, leading indicators like the stock market are also telling a happier story. Last January the Dow Jones Industrial Average was under 9000. Today, it trades well over 10,000. Significant market movement can be seen as a predictor of the overall direction the economy is headed.
What does this mean for Small Business?
With all the uncertainty 2010 offers, it is clear that small employers must continue to find ways to reduce costs, increase productivity, and look to rebuild lost talent. However, with all the demands of digging out of 2009, many multiple-hat wearing owners find the prospects daunting. One of the hottest trends throughout the recession is Human Resources Outsourcing. HR Outsourcing firms have the internal staff and know-how to assist small companies in all three of the above-mentioned areas. And they can it quicker, simpler, and more cost-effectively than a small business could do on their own. In our next posts we will review how HR Outsourcing firms can assist in these three areas.