Sales up, but still hesitant to hire

HIRE GROUND: Bill Juaire, co-owner of New England Copper, at work in his Smithfield company’s workshop. With revenue up, Bill and his wife, Susanne Juaire, are considering additional hires. / PBN PHOTO/DAVID LEVESQUE
HIRE GROUND: Bill Juaire, co-owner of New England Copper, at work in his Smithfield company’s workshop. With revenue up, Bill and his wife, Susanne Juaire, are considering additional hires. / PBN PHOTO/DAVID LEVESQUE

Business is busy at New England Copper Works.
Susanne Juaire, who runs the Smithfield manufacturing company, launched in 2001, with her husband, Bill, said the last three years have been their best despite a still-slow recovery nationwide from the 2008-2009 economic downturn.
Revenue is up and the workload, at times, has led the small-business owners to think of hiring additional staff.
But they haven’t done that yet.
“It would have been nice to hire someone last year, but we’ll just ride it out as much as we can,” she said. “It’s tough even though it’s looking really well, because we don’t have a crystal ball.”
The Juaires’ approach is one of what business trend watchers call cautious optimism. They’re happy to report increased sales but they’re not confident enough to count on the good times lasting to take on new hires.
In a recent survey from Constant Contact, a Waltham, Mass.-based email marketing-services firm, 59 percent of small businesses reported they have seen revenue increase this year.
But 66 percent of respondents said they are not planning to hire any full-time employees within the next six months. In Rhode Island, where the unemployment rate is still hovering close to 11 percent, that’s not great news.
“It’s sort of continued, not-so-good news on the hiring front, which is disappointing,” said Joel Hughes, Constant senior vice president for strategy and corporate development. “Small businesses are trying to do the same thing as people, which is to make sure [they are] healthy through what continues to be a very difficult recovery.”
The Constant Contact Spring 2012 Small Business Pulse Survey asked 1,000 small businesses and nonprofits across a range of industries from its customer-based research panel about their top operating concerns.
Of the 728 businesses that responded, 74 percent have between zero and 10 employees.
Sixty-three percent of respondents said they haven’t hired any new employees so far this year and 50 percent said they have kept payroll the same. Nineteen percent said they are in need of extra personnel but can’t afford to take them on.
“The survey results are not surprising to me,” said Adriana Dawson, state director for the Rhode Island Small Business Development Center at Johnson & Wales University. “[Small businesses] are making that decision to not hire full time because there’s still uncertainty.”
The Constant Contact survey was conducted in May, just before the end of the second fiscal reporting quarter for this year.
Seventy-nine percent said they expected revenue to be better for this year over 2011. Only 11 percent of respondents said they expected 2012 revenue to drop going forward, while 30 percent said that revenue should remain flat.
And while the majority of small businesses report they are not hiring, 18 percent said they will hire full-time employees before the year’s end.
Jeshua Zapata is one of the owners of Xzito, an Internet marketing-strategy firm in Johnston. Xzito has been in business for more than eight years and has nine employees.
Zapata is in the process of looking for a Web designer. The company has added three positions in the last four years.
“People are finding ways to grow,” Zapata said. “In order to do that, they have to market and get out there.”
That’s obviously good news for Xzito and, Zapata admits, gives his company an advantage because, perhaps, instead of additional hires, small businesses are putting increased profits back into the business in things such as marketing.
Seventy-six percent of survey respondents said attracting new customers is their biggest business concern right now and 29 percent said marketing spending has increased so far this year.
Forty-five percent of survey respondents said operating costs have increased this year and 43 percent reported feeling they did not have adequate cash flow.
Juaire said that was true at New England Copper Works, though she did not have available numbers on that increase or on revenue. In addition to her and Bill, there is one other full-time employee at the business and two part-time workers.
Their full-time employee was hired about four years ago.
“[Additional costs] are why we haven’t hired yet,” Juaire said. “We invest so much in training. It’s really a skilled trade.”
Still, the Juaires plan to hire a part-time employee in the coming weeks.
Retail businesses might be an entirely different story from manufacturing or service providers such as Xzito.
Taking into account that summer and, in particular, August, are generally horrible months in the retail sector, t­hings still aren’t looking too good, said Paul DeRoche, senior vice president of government relations at the Greater Providence Chamber of Commerce.
And, he said, the industry shouldn’t expect the fall, even with back-to-school spending, to make much difference.
Dawson feels small businesses are smart to still take a wait-and-see approach.
She pointed to the upcoming November election as a possible benchmark, theorizing that owners may be waiting to see if a potential new administration would influence how they run their business.
Hughes notes that while saying nearly 60 percent of businesses have had increased revenue this year, that’s still just six out of every 10 businesses.
“When you have a real recovery, I’d say you’re at 80 percent,” he said. “It feels like at that point, the whole market is up and that spreads optimism.”
Juaire said she’d consider more seriously taking on another employee if she secured more long-term contracted orders, which indicate optimism from her clients, and when work flow has been consistent for six months.
Zapata’s business, he said, will keep hiring on an as-needed basis.
“Companies like us are having good growth because of the nature of the economy,” he said. “I would say what has been [more] difficult has been finding the right person.” •

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