Survey: Nearly a third of manufacturers and distributors plan to increase workforce size in 2013

Driven by increased demand for their products and services, almost a third of manufacturing and distribution firms in the small and midsized business (SMB) sector expect to increase the size of their workforce in 2013, and 45% plan to keep it the same, according to the results of a survey by Sage North America. Sage, a leading provider of business management software and services to more than 6 million small and midsized businesses worldwide, conducted the survey among 242 executives of SMB manufacturers and distributors.

The Sage SMB Hiring Outlook Survey revealed that among these businesses in the U.S. and Canada who plan to add jobs, 83% cited a stronger demand for their company’s products and services, while 23% said an improved economic outlook is helping drive the decision. Among companies who hired in both 2012 and 2013, 39% expect to hire more employees this year than in 2012, and 52% expect to hire about the same.

In a recent interview, Joe Langner, executive vice president, Mid-Market Solutions for Sage North America, said, “the survey confirmed what most believe about the growth of small and midsized businesses in every industry, and that is demand is what drives hiring, period.”

Only 7% of companies stated that they have decreased or will decrease the size of their workforce in 2013. The economy was a bigger factor for these firms that planned to decrease their workforce size or keep it the same, with 45% saying economic uncertainty influenced their decision and 42% citing a steady or weakened demand for products and services.

“The good news is that most of the manufacturers and distributors we surveyed are planning to increase their workforce or at least stay the course in 2013, but of course we’d all like to see a stronger employment outlook,” said Langner. “Economic uncertainty and the costs of doing business are making it even more important for SMB manufacturers and distributors to streamline their operations and take advantage of technology and tools that help them run smarter, more cost-effective businesses.”
Langner suggested business leaders are looking to mobile technology to help improve efficiencies and employee productivity. “Small and midsized businesses are using technologies like cloud and mobile to help level the playing field at a surprising rate,” he said, citing a recent Sage survey on mobile device usage by SMBs that found that 85% of manufacturing respondents believe that mobility is having a positive impact on their business. According to that survey, over the past year, smartphones (78%) and tablets (63%) have increased in their use for remote access to business information, followed by laptops (41%). “Remote access has made it easier for a sales representative within a manufacturing or distribution firm to get company information while in the field interfacing with clients,” said Langner. “Mobile, CRM and cloud technologies serve as powerful ways that SMBs can compete with their larger counterparts.”

The hiring survey revealed that of those SMB manufacturers and distributors who have hired or plan to hire in 2013, 92% seek full-time help, which seems to run against common speculation that the Affordable Care Act would dampen job growth, specifically affecting the hours of full-time employees. “From a manufacturing perspective, what surprised us was the fact that so many small and midsized businesses are planning to hire full time versus hiring part time or contract workers given the implementation of the Affordable Care Act,” said Langner.

Among businesses with fewer than 50 employees (the threshold for being affected by the ACA), it makes sense that they would consider hiring full time workers, he added. The survey found that of businesses with 20 or more employees, only 17% cited the ACA as a reason they are not hiring. “There is still a lot of confusion about the Affordable Care Act and its impact on businesses. Advantages to hiring full time workers include an opportunity to develop talent that will hopefully grow with your organization. Businesses with engaged employees tend to outperform those with less employee engagement and businesses with higher rates of employee engagement tend to return more in profits.”

The survey was conducted online among 242 U.S. and Canadian manufacturing and
distribution executives between May 2 and May 15, 2013. The results have a margin of error of +/- 5% at a 95% confidence level.