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Company not hiring? Doesn't mean it is in trouble

Posted August 18, 2011

Economy
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— Just because a company isn't hiring doesn't mean it is struggling, a local economist said Wednesday. 

"U.S. companies are sitting on over $1 trillion in cash – the highest level in 50 years. They've got the profitability. Profits this year for the S&P companies may set a record, an all-time record," said Harry Davis, a professor Appalachian State University and economist for the North Carolina Bankers Association. 

Davis said economic uncertainty is driving most business decisions.

"So, they're not investing in plant and equipment, and they're not hiring workers," Davis said. 

The American Institute of Certified Public Accountants is one of the Triangle companies bucking the trend. The AICPA has hired 40 new employees this year and plans to fill 50 more positions.

Lack of new hires doesn't signal trouble Lack of new hires doesn't signal trouble

"We're going to make an investment in resources, and I think it's going to prove out as the next couple of years play out," said Victor Velazquez, AICPA senior vice president.

Gary James lost his previous job because of international competition. He now works at the AICPA helping to develop an international newsletter. 

16 Comments

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  • LambeauSouth Aug 19, 2011

    I am with United. My monthly premium went from $560 / month to $810 / month this year. And my deductables & caps have sky rocketed also. I am 50 and in good health....United is a racket and your company is shopping around, I don't pay any premiums
    NOTHING.....

  • WRALblows Aug 19, 2011

    If your company isn't hiring they are doing the right thing. Streamlining through automation for increased revenue and margins is the responsible way to run a for-profit business. If you work for a company that hires just for the sake of warming chairs and spending money then you work for a company that will not be able to remain price competitive and will fail in a very short time.

  • vraptor Aug 19, 2011

    Here is something coming to your employer soon. The cost of employing you is becoming too expensive. So there is a big move to make all employees temps and make them pay for their benefits.

    If you pay for your own health insurance like I do. You have seen how much it has sky rocketed even before OpieCare goes into effect.

    I am with United. My monthly premium went from $560 / month to $810 / month this year. And my deductables & caps have sky rocketed also. I am 50 and in good health.

  • SaveEnergyMan Aug 19, 2011

    They're sitting on their capital because of the uncertainty. This means they're getting a lower return on it and things aren't being modernized or even repaired (deferred maintenance). It could be a boon in a few years (as everyone spends to catch up) or a bust (as everything falls apart), if things don't get better here soon.

  • WooHoo2You Aug 19, 2011

    In other news, just because I'm not hiring people to mow my lawn, give me a shoulder massage, and fix my car, it doesn't necessarily follow that I'm doing bad financially.-Pseudonym

    Amen. Heck, that might be one reason you are doing okay financially. You are NOT throwing your money into the wind.

  • redspringssean Aug 19, 2011

    WRALisLiberal I couldn't agree more with with your statement...
    "obamacare is one of the biggest issues causing businesses to just hold tight, including me."

    This is the uncertainty that Davis is talking about and because all the small businesses are worried if they can even afford to keep the people they have now the resulting loss of consumer confidence is causing people hunker down on hold on to what money they have left.

  • itsnotmeiswear Aug 19, 2011

    Hater: I've sat in many of those meetings with health insurance agents and never once did I consider not hiring people because of some government threshhold. I was always concerned that my competitor didn't care about his employees like I did and would not pay for insurance. The biggest problem with the current healthcare law is that businesses that currently offer insurance might drop it because the penalty is much less than the cost of health insurance to the business. If you plan to offer coverage to your employees regardless, the only issue is to provide coverage that meets the well defined requirements.

    If a business has employees and doesn't plan to offer health insurance as a group to their employees, they are planning to fail because the guy down the road that offers benefits will eventually take your good employees.

  • ObamaMustGo aka NCcarguy Aug 19, 2011

    obamacare is one of the biggest issues causing businesses to just hold tight, including me.

  • ICTrue Aug 19, 2011

    Not to sound like a broken record but companies will continue to sit on their cash and hold their breath until the three ring circus that is the Obama administration is gone.

    I know all of you liberals think your so much smarter than everyone else but you still can't seem to figure out how the open market works....heard that on the tee vee, duh.

  • Pseudonym Aug 19, 2011

    In other news, just because I'm not hiring people to mow my lawn, give me a shoulder massage, and fix my car, it doesn't necessarily follow that I'm doing bad financially.

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