Wednesday, June 20, 2018
Business

Small businesses rev up hiring after months of uncertainty

NEW YORK — Nina Vaca is interviewing job applicants at her staffing company again after putting hiring on hold at the end of last year.

Vaca expects to hire more than 50 people for her firm, Pinnacle Technical Resources, by the end of 2013. Demand is soaring for the high-tech temporary workers it places at large corporations. The reason for her caution: Months of uncertainty about federal taxes and budget cuts has disappeared.

"It's a great time to double down. People are looking for information technology talent," says Vaca, whose 160-employee company is based in Dallas.

Vaca's story will sound familiar to small-business owners across the country. They want to add staffers, and many are hiring, but they're taking their time before they commit to a new employee. Their caution helps explain the slow but steady growth in jobs nationwide. Companies of all sizes have added an average of 163,000 jobs a month since March, according to the Labor Department.

Vaca held off expanding her staff while she waited to see what impact federal budget cuts would have on companies. But by the end of the first quarter, she could see that companies needed temporary high-tech workers, and that her business would be strong enough to pay for her own hires. She expects her revenue to rise 12 to 15 percent this year.

"We were cautious in our hiring, and then, literally, (business) exploded," she says.

Some owners are waiting to hire because they need to be sure they can pay salaries and still meet their other expenses — staffing is a flexible expense, but expenditures like rent, taxes and utilities are not.

Startup companies that have little or no revenue can't make many hires unless they get money from investors.

Personify, a Chicago company that makes videoconferencing software, held off hiring late last year in part because investor money was scarce. The economy and the uncertainty over the federal budget and taxes made investors wary, CEO Sanjay Patel says. But the company also has to be cautious because it must answer to investors about how it uses their money.

"We weren't in a situation where we could just grow to our hearts' content," Patel says. "It all had to be justified according to the business plan."

Personify's hiring process has also been slowed by a shortage of skilled job candidates. The company is building a sales and marketing team, but while there are many salespeople around, they're not all qualified to sell a complex high-tech product, Patel says.

"You have to be able to speak confidently about a very new technology when a prospective customers asks about how we do what we do," he says.

A lack of qualified applicants is one of the reasons many small businesses have been slow to hire, according to surveys including the monthly report on hiring by the National Federation of Independent Business.

Patel estimates that he considered 20 to 30 people for three positions he recently filled. The company, which has 26 employees, hired one staffer in December, another in May and has a vice president of marketing arriving this month.

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