The ripple effects of Obamacare stretch from individual workers to large companies and their abilities to hire new employees.
Using data from 300 accountants, financial information company Sageworks found two-thirds of business owners are less inclined to hire under the new regulation.Brian Hamilton, chairman of Sageworks, said it’s not surprising that business owners would cut back on hiring if they’re going to be charged more. His frustration is with the timing of the implementation of the Affordable Care Act.
“My big problem right now is the extension or the delay of the regulation because it’s creating more uncertainty in a market that’s already stuck in the muck on the employment side,” he said.
Sageworks surveyed accounting professionals who work closely with private firms. It found that 66 percent expect the new health care changes will make it less likely that businesses will add new employees in the next year. Sixteen percent said it would have “no impact,” and 14 percent of respondents said they were “unsure” about the ultimate impact. Only 2 percent said the Act makes it “more likely” that businesses will add new employees.
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“The fundamental metrics of private companies are strong but they’re not hiring,” Hamilton said.
Typically over the past 150 years, what companies do is very predictable, according to Hamilton. “They make more money, they get more efficient, for a little while, maybe a year or two years, but then they reinvest that money back in to growth and that’s what they’re not doing,” he said. “And by the way it’s not just on the employment side, it’s on the debt side, too. At this point in the recovery we usually see big net gains in borrowing. Businesses want to buy stuff, buy equipment, hire people to run that equipment [but now] they’re just more tentative.”
Sageworks’ surveys found that employers are getting more done with fewer people. Temporary placement agencies are growing 16 to 20 percent per year, he said.
“There’s a move from high quality jobs to less permanent jobs,” said Hamilton.
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