Despite increasing sales, small business owners are still hesitant or unable to improve hiring practices, a new survey conducted by Sageworks has found. The report, which gathered data from the financial statements of 1,000 private companies, revealed that businesses increased sales by 10 percent in May.
These numbers are roughly equivalent to figures released from April, as well as results from a similar study conducted in May 2012. This consistent progress is a positive sign of sustainable improvements across the business sector, but even as sales numbers improve, hiring has remained stagnant.
Rebounding industries
Among the sales and hiring report figures, there were many positive points. Certain sectors are making important contributions to increased economic improvements, namely an advancement in sales.
The service industry in particular is on the rise. Service companies such as consulting firms, computer design companies, and architecture businesses are thriving. The consulting sector grew by more than 15 percent in May, as did staffing firms. Professional services also grew by around 10 percent, while sales in building and residential companies rose by 9 percent.
One potential reason for these improvements may be that, when individuals were laid off, they became entrepreneurs and began their own companies. Many hope that these gains will lead to more consistently positive hiring through the sector, as potential workers may find it easier to break into these growing fields.
Conservative hiring practices
Both large and small companies are hesitant to take on more employees, the same study found. New hiring at businesses has remained flat, and unemployment rates across the country moved upward from 7.5 percent in April to 7.6 percent in May.
This is due in large part to the fact that, during the recession, companies learned to make do with fewer workers as layoffs spread across the nation. Owners and company managers were forced to operate under tough conditions, and have now grown used to these circumstances, as have employees.
During the past several years, staff members have become accustomed to taking on excess work. In addition, particularly in the early years of the recession, workers and owners alike adopted new technologies to cut costs and stay relevant.
Small businesses that need some advice on growing their companies or hiring new employees can turn to National Funding for extra help. National Funding can provide assistance with information on everything from small business credit card processing to equipment financing.
