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Are small businesses hiring in 2012?

January 4, 2012

Hiscox eDNA survey finds that 61% of small businesses plan to keep their staff level flat in 2012.

Small businesses are hiring in the new year.  Well, at least some of them are, but some are also going to have to cut staff.  Overall the majority of US small business owners Hiscox surveyed (61%) plan to keep their staff level flat in 2012, which these days may be the most we can ask for.

Will you be hiring new staff in 2012?

  • 10% – Yes, either junior or senior people
  • 61% – No, we will be keeping the same number of staff
  • 7% – No, we will be making new/additional layoffs
  • 23% – Don’t know

At least the number of small businesses already anticipating layoffs in 2012 is less than 10%.  But, when small business are finally ready to begin hiring again, whether it’s this year or next, are US colleges and universities producing the talented and motivated staff they need to grow?

How do small business owners rate new graduates?

The Hiscox eDNA survey of small businesses had owners rate their new graduate hires on a variety of dimensions.  As with some of the other results from this survey, the variations between regions of the US were particularly interesting.

If you’ve hired new graduates in the last two years, how would you rate them on the following factors?

Keenness and motivation (All US)

  • 10% – Excellent
  • 37% – Good
  • 43% – Average
  • 9% – Poor

This generally paints a pretty positive picture.  But, a closer look raises some questions about the enthusiasm of new graduates, particularly in the South.  15% of small business owners in the South rated the keenness and motivation of new graduates as poor, compared to only 4% in the West and 6% in the Northeast, respectively.  So, new grads in the South appear to be less enthusiastic than their counterparts around the country.  But, how about their work ethic?

Work ethic (All US)

  • 14% – Excellent
  • 21% – Good
  • 43% – Average
  • 22% – Poor

The findings here echo those of other recent surveys finding that millenials (people born in the 80’s and early 90’s) have a poor work ethic compared with other generations.  And again, the South is lagging behind.  While 56% of Northeast small business owners rated the work ethic of new graduates as Excellent or Good, only 25% received these rating in the South, and 28% ranked their work ethic as Poor.

Motivation and a good work ethic are key attributes for small businesses where the contributions of one employee can make a real difference.  These findings are telling us that small business owners in the South aren’t finding these in their recent graduates.

How to hire the right new graduates

More and more people are starting to view hiring as more of an art than a science.  And with the results of our study showing that hiring new graduates particularly can be a mixed bag, it’s important that small businesses protect themselves.

A good professional liability insurance policy will cover your company for work done in the past, back to an agreed date (for Hiscox policies, that is usually when your business started), so even if an employee does something wrong and leaves, you can be covered for their mistakes. Professional liability insurance coverage should also cover all your staff: full-timers, part-timers, your temps and sub-contractors, too.

We hope these statistics will improve during 2012 and more small businesses will start hiring. If you’re doing well enough to bring on more employees, you also need to make sure you’re covered with the right small business insurance.