Wells Fargo: Biz Owners Wary of Hiring Despite New Tax Credits

Small business ownersThe majority of small business owners say they are not planning to add employees despite tax credits recently enacted for those hiring unemployed workers, according to the latest Wells Fargo/Gallup Small Business Index.
Wary of the moderately-paced economic recovery, the business owners seem to be holding the line at their current staffing levels.
Last month, the Internal Revenue Service made available forms for employers to claim the payroll tax exemption under the new law, known as the HIRE Act.
But in the Wells Fargo/Gallop survey of 603 small business owners, 52 percent said they were “very unlikely” to hire new employees as a result of the tax incentives. In addition, 67 percent said they were keeping weekly hours for employees at the same levels, with 19 percent saying they were decreasing hours.
“Small businesses are critical to the health and strength of our economy, as they employ about half of the private sector workforce and create more than 60 percent of net new jobs annually in the U.S.,” said Doug Case, Small Business Segment manager at Wells Fargo. “This has been a challenging period for small businesses. They are looking for assurance of an economic rebound before staffing for growth.”
Thirty-four percent of respondents reported hiring fewer employees than needed. Reasons cited included: Concerns about insufficient revenue or sales (81 percent); and the potential costs of providing healthcare (65 percent).
The economic challenges did not deter the vast majority of owners from pursuing their small business goals, with 80 percent saying “they would become a small business owner all over again if they had to,” Wells Fargo said.
The survey was conducted April 12-16.
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