With businesses making record profits and sitting on trillions in cash , why aren't they hiring?
It's because they don't need to. They are squeezing productivity from employees and using technology to expand. There are other components, but you don't have to look far for explanations.
Economists say many employers aren’t really feeling that much pressure to hire new workers.
After all, many workers who have been able to hold onto their jobs these last few years will tell you that they are working harder than ever, either because business has picked up or because they are also taking on responsibilities for people who have been let go. And yet, not many people have received significant raises in recent years as wages have stagnated.
Because companies can push their employees to be more productive for the same or less pay, they don’t have a great incentive to hire more workers. Instead, they’re more likely to either push people harder or come up with technological solutions for getting more work done.
“All companies are operating very lean,” Mayland said. “For many businesses, they’re back up to the 2007 to 2008 levels of business activities, but what we find is they’re doing it with significantly lower levels of employees.”
In addition, technology and other productivity improvements have helped boost per-employee sales and profits in recent years, which could reduce the urgency for some companies to hire. In the Sageworks survey, 23 percent of respondents said their clients’ efficiency has reduced the need to hire additional people.