Fewer Workers are Hired for Startups
The job picture for the United States has its ups and downs and the numbers that they have been releasing have been both good and bad. Unemployment remains rather high, but the numbers of new applications for unemployment benefits have been going down, but at a very low rate. New jobs are just not being added at a rate that is consistent with a recovery from a recession. When the jobs added number increases closer to the amount of new unemployed, we have something that maybe considered a recovery, but until then it’s hard to say what is really happening out in the world today. Start-ups are one of the most important entities that create jobs. Most companies have been downsizing, so we cannot expect much help from them as they scramble to find the money, through sales or business loans, to continue to stay in business. They have so many monetary issues that they often hemorrhage money and don’t even realize it. New companies have the hunger and desire to make it, so we need them to add jobs at a good, steady rate to combat the unemployment issues that we face right now.
Start-ups, while important, need to save money as well and often are slow to add employees. In this age of technology, less people are needed to perform all of the operations needed for any company, so start-ups end up hiring less than they ever have. When a company employs the bare minimum, it adds little to the employment pool. There are many that believe that a start-up needs to hire as many people as possible to help the situation, but that could a financial strain on the start-up. It is more important to allow the start-up to grow and become stable to hire more employees when they are ready. In the 1990’s, the average start-up started with an average of 7.5 employees, but nowadays, it is about 5, which is a significant change. It seems that start-ups also utilize outsourcing for many of their tasks at the beginning and refrain from hiring employees for specific tasks that can be outsourced easily and at low costs. The most important information that can be gleaned from this is that we need to fix our employment structure and find ways to significantly lower the unemployment rate. Not everyone can be employed, but lowering the rate is essential to help the economy grow as the recession technically ended over two years ago.
The job outlook is the one thing that keeps us from declaring the country on the way to prosperity. It could be the lack of jobs available due to various factors including slow growth of the economy, outsourcing and the heavy use of technology to replace individuals in the workplace. Entrepreneurs need to step to the plate and start to develop their ideas so that they can establish a company that gives back to the economy through job additions, which is the only way to conquer the job issues that we see today.
Business Techniques July 12, 2011

