An increasing number of Americans aren't merely launching their own companies, as impressive as that is, they're also succeeding at the task – and hiring more workers as a result, a newly released survey suggests.
According to a recent poll conducted by the Pepperdine Graziadio School of Business Management and Dun & Bradstreet, nearly 9 in 10 respondents in the third quarter of last year confirmed their company experienced growth compared to 2016. During the corresponding three-month period a year earlier, 80 percent of business owners were either extremely or somewhat confident about improved sales results.
Entrepreneurs are similarly bullish about turning a profit, the survey showed. Approximately 63 percent of responding business owners said they were in the black over the previous 12 months, with revenues up an average of 9.2 percent, a slight increase from 8.3 percent during the penultimate quarter of 2016.
Financing activity down
Perhaps because a larger share of small-business owners are reaching their goals, fewer are taking advantage of financing opportunities, seemingly satisfied with their recent track record. The Private Access Index report showed companies are taking out fewer loans for expansion purposes, though at 66 percent – compared to 62 percent in the previous quarter – financing activity is still robust.
Dr. Craig R. Everett, Pepperdine Private Capital Markets director, indicated that company managers are treading cautiously heading into 2018, even though sales are encouraging.
"U.S. businesses are doing well, but these results suggest to us they are planning for an uncertain future by lowering their debt levels," Everett explained. "Slowing revenue growth is the cause for uncertainty but other business fundamentals are strong."
"The unemployment rate is at its lowest point since 2000."
2 million jobs created in 2017
Proof positive of this is the pace of hiring. In 2017, more than 2 million jobs were added to the economy by employers, according to the Department of Labor, and the unemployment rate fell to 4.1 percent. That's the lowest jobless rate in 17 years. During the third quarter, two-thirds of respondents to the Pepperdine and Dun & Bradstreet survey said they fully intended to increase hiring activity over the course of the next six months. A slight increase from 65 percent who indicated as much in the second quarter, hiring expectations have jumped 10 percent over the last year.
Corroborating the poll findings is a separate survey conducted by Harris Interactive on the behalf of CareerBuilder. Nearly 45 percent of employers indicated they plan on recruiting more full-time employees in 2018, with 51 percent hiring more part-timers.
"More job creation, higher voluntary employee turnover and intensified competition for talent will be the main themes surrounding employment in 2018," said Matt Ferguson, CareerBuilder CEO. "There is a perfect storm happening in the U.S. labor market. Low unemployment paired with lagging labor force participation and a growing skills gap is making it very difficult for businesses to find qualified candidates – and this is for all types of roles."
"22% will hire workers outside of the U.S. in 2018."
As a result, many business owners are thinking outside the box, believing that by doing so, they'll have an upper edge on their competition. For example, 64 percent of respondents in the CareerBuilder survey said they'll start reaching out to potential recruits before or shortly after they graduate from college. Additionally, around 1 in 4 plan to seek out potential employees who live somewhere other than the U.S.
"When businesses hire employees, they are making a significant commitment to their future," said Bodhi Ganguili, an economist at Dun & Bradstreet. "When business owners have greater confidence in the economy, hiring will accelerate."
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