Businesses optimistic about hiring in 2014News added by Benefits Pro on November 26, 2013

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Joined: September 07, 2011

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By Dan Cook

Forget the customer service focus. Businesses smell opportunities ahead and they are looking right now for experienced sales personnel.

Such is the conclusion to be drawn from results of a survey of nearly 1,000 private companies by Pepperdine University’s Graziadio School of Business and Management.

The survey found that two-thirds of these companies believe the year ahead will offer room for growth. More than half are ready to hire new employees. When asked who they’re looking to hire, here’s what they said:

No. 1: Sales and marketing personnel (57 percent cited these are their top need)

No. 2: Skilled labor (45 percent cited these are their top need)

No. 3: Service/customer service (36 percent cited these are their top need)

But if two-thirds see a strong business climate ahead, why are just half planning to hire? Economic uncertainty, the survey revealed.

That’s the No. 1 reason that some private firms aren’t committing to hiring new staff. The hangover from the last recession still has businesses skittish about long term economic planning, Pepperdine said, and so many employers will take a wait-and-see attitude toward hiring.

The private company survey showed that virtually all these businesses, regardless of size, want to prepare and execute growth strategies. But the smaller ones — those with less than $5 million in revenue — report that they don’t have the internal capacity to pull it off at present. And while commercial low rates are reasonable, many businesses foresee problems qualifying for the money they need to grow.

“The good news for businesses trying to expand is that interest rates continue to fall for commercial loans of nearly every size,” said Craig R. Everett, director of the Pepperdine Private Capital Markets Project and assistant professor of finance at Pepperdine University’s Graziadio School of Business and Management. “This low interest rate environment makes expansion very affordable for those firms that qualify for these loans. Unfortunately, getting access to these funds remains much more challenging for small businesses than it is for the middle market.”

Other key findings include:
  • The bank loan success rate for businesses is down over the past 12 months: 78 percent success rate reported in 2012 compared to 69 percent in 2013.

  • Forty-five percent of banks who responded see general business conditions improve in the year ahead and 57 percent foresee an increased demand for loans.

  • According to 31 percent of privately-held businesses, the repeal of further modification of the Patient Protection and Affordable Care Act would be the greatest trigger for job creation in 2014. Other factors: increased access to capital (24 percent), and regulatory reform (15 percent).

  • Forty-six percent of venture capitalists surveyed are targeting information technology and another 11 percent are planning to invest in basic materials and energy. Last year’s survey showed that 33 percent of Venture Capitalists were targeting information technology and 23 percent were targeting health care or biotech.
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