Unemployment numbers remain consistently high and CEOs are wary of future business conditions. In fact, chief executives are so pessimistic that over 66 percent expect that the size of their workforce will either stay the same or decrease over the next year according to Chief Executive magazine’s CEO Confidence Index for August 2011.
Of those who plan to hire, most will do so in a limited way; 74 percent of hiring CEOs will increase their workforce by less than 10 percent. This does not bode well for the 9.1% of US workers who were unemployed in July.
So what will it take for CEOs to start hiring?
Many challenges in the business climate are keeping CEOs from hiring, but there are distinct environmental changes that would make chief executives more likely to increase their workforce. Chief Executive asked CEOs to rank factors on a scale from 1 to 10, 10 being extremely influential in promoting increased hiring and 1 being inconsequential to promoting hiring.
A proven backlog of work or an increase in revenue was the single most important factor that would influence CEOs to begin hiring; 88.2 percent saw this as very important to extremely important.
Next in terms of importance was evidence that the US is expanding and will not fall back into a recession; 77.2 percent saw this as important to extremely important.
The passage of the Affordable Care Act has been a controversial one and it’s constitutionality has been questioned and examined by the Federal court system. The Eleventh Circuit has ruled that the “individual mandate” is unconstitutional, while approving the rest of the provisions, as is outlined in this Forbes article. And business owners are upset that increased costs will add an additional burden in an already difficult economic climate. The repeal of this act is just next to personal and national evidence of economic expansion in the eyes of CEOs.
The ranking of hiring-inducing priorities that were ranked “important to extremely important” were as follows:
- Backlog of work or increased revenue — 88.2 percent
- Evidence of economic expansion — 77.2 percent
- Repeal of Health Care Reform or eliminate uncertainty over its provisions — 71.6 percent
- Reduction in government regulation of business — 62 percent
- Government holds line on debt ceiling — 56.3
- Reduced corporate tax rate to OECD average — 54.3
- Balanced federal budget — 53.9
- Gov’t passes all free trade agreements without delay — 48.8
- Repeal Dodd-Frank or eliminate uncertainty over its provisions — 48.2