Big Business is Not Hiring
Don't go looking to big business to lift us out of the fallen job market. Small businesses with fewer than 100 employees are responsible for 2/3 of the additional jobs during a recovery -- the heavy lifting when it comes to job creation is not being done by the big guys who employ tens of thousands. In fact, only about half of the S&P 500 have added 1 percent to their payrolls, and almost a third lowered their employee head count in 2010, according to a report in USA Today.
What's more, big businesses with 500 employees or more hired only 17,000 additional workers in March, while mid-size businesses hired 82,000 employees and small firms with 50 workers or less added 102,000 to their payrolls, according to Automatic Data Processing.
How can this be, especially when stocks are rising, and those same big companies reported a 47 percent profit increase last year? Well, there are a number of reasons. Among them the fact that 20 percent of the nation's top industries are not yet done receding. Telecommunications and utilities are still actually cutting back on jobs.
Also, mergers are wreaking havoc with employment numbers among major U.S. companies. When one company merges with another, many jobs become redundant and employees get the boot. Corporate America is merging and acquiring all the time. Mergers and acquisitions were up 12 percent in 2010.
Outsourcing is another reason U.S. corporations are not increasing domestic employee headcount. As much as we hear about "home sourcing," we also hear a lot about the economy "going global." That's often business-speak for outsourcing jobs to countries where labor is, quite simply, cheaper.
And finally, major corporations are having a hard time creating jobs fast enough to compensate for all the jobs lost during the recession. Businesses learned to work leaner and meaner, some using robots and other forms of automation. And while business is picking up, that's not happening as quickly as it dropped off in the three years preceding.
There is hope, however, and it comes from industries that hire both at the top and at the bottom levels of the pay scale. High tech, for example, can't seem to find enough qualified employees to meet its ever-increasing needs, and McDonald's just announced that they plan on hiring 50,000 additional workers in one day. If your skill sets are somewhere in between, it's best to seek employment at a small or mid-sized firm.
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