The end of the year is here. We hope you were able to minimize any losses that might have occurred in 2010 and are putting together a sound strategy for 2011. By most predictions, next year should be a lot better for businesses than this year, as the economy continues on a slow but seemingly steady uptick. Let’s take a look at some of the facts and predictions that are in place, which should make doing business in 2011 less stressful than it was in 2010.
2011 Positive Outlook
- The WSJ Economist Survey predicts a 3% increase in GDP (sum of all goods and services produced within the United States) in 2011.
- The survey also indicates a reduced prediction that a double digit recession will occur to 15%; the number was at 22% in September.
- Economists polled in the survey also estimate Increases to be experienced especially by those businesses that operate in retail sales and manufacturing.
- 80% of CEO’s involved in the Business Roundtable predict sales increases in first half of 2011.
- 59% of CEO’s involved in the Business Roundtable expect to increase their spending on equipment (great for the manufacturing industry).
- A payroll tax cut pertinent to Social Security taxes will be granted to employees (employers will not experience a reduction in the amount that they match), which puts more disposable income in consumers’ hands, which should be immediately felt by the hospitality and retail industries
These predictions provide a basis for a lot of optimism for business people in 2011. The economy should be growing, which will present more opportunities and hopefully in the long run, more customers. To be fair there are some predictions for cost increases that will directly affect business owners.
Potential Cost Increases for 2011
- Materials- As the economy rebounds, basic supplies and resources are expected to become more costly. This could especially impact commodities, which include everything from oil to copper.
- Health care- While health care reform is still not set in stone, it would be unwise to not calculate a cost increase here.
- Labor- Hiring is expected to increase, so with it comes more salaries, payroll expenses, taxation matching, etc.
As you can see, economists and CEO’s alike seem to be predicting more good than bad on the horizon. While that is great news, 2011 will still require a steady hand and a carefully prepared plan for business owners. Two of the anticipated cost increases are pertinent to labor and health care. Both of those increases will directly affect your bottom line and will be financially measurable the first quarter that you start bringing on new people. There is no reason to be too pessimistic; after all bringing on additional staff means that you are growing and on your way to increased profits.
Taking a cautious approach to hiring will be the best way to grow while reigning in your company’s spending. Using temporary labor might be just the answer you are looking for. Think about the advantages of temps when you need to be cautious with spending.
- No money spent on recruiting-Save yourself from paying for job listings, paying to interview, and paying current staff to take time to perform both of those functions.
- Predetermined expenses- Temps come with a set fee and we take care of all of the extrinsic costs like payroll and taxation matching.
- Simple to terminate unnecessary employees- If your predictions are a bit optimistic and you decide that you don’t need that much staff, it is easy to reduce payroll costs by simply using fewer temps, as opposed to laying off a new hire.
We wish everyone the best in their financial endeavors in 2011. If you are looking for ways to save money and time while you grow, feel free to give us a call at 1-877-522-7797. We can tell you how to save on staffing throughout Arizona, from Phoenix to Flagstaff.