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Why Aren’t Companies Hiring?

Forbes (06/04/12) Mary Ellen Biery

Brian Hamilton, chief executive of Sageworks, says it is uncertain why job creation is so slow while the economy is growing, noting that “privately held companies, which actually produce the vast majority of new jobs, are performing quite well.” However, he says business owners remain worried about the economy, citing a Sageworks survey of accountants, bankers, and other professionals in which 32% of respondents attributed the lack of hiring among their clients to economic concerns. Additionally, 22% say private companies have lingering anxiety from the last recession, and 23% say increases in efficiency have put a damper on hiring needs. Other reasons for stagnant job creation could be late customer payments and slow movement of inventory tying up cash that would be used to hire new workers, a skills gap, more people dropping out of the work force, and the effects of the housing market downturn.