We have seen the future, and it sucks.

Why Companies Aren’t Hiring

5th December 2012

NBC News just can’t understand it.

The lack of enthusiasm about hiring is surprising in some ways. Businesses have built up hoards of cash in the last five years and have largely been running their businesses with minimal staffs who are being asked to work harder. Worker productivity grew at a 1.9 percent annual rate from July to September, which some experts say is a sign that employers are reaching the limits of how much they can squeeze out of their existing workers.

“You would think that businesses would be salivating,” said Joel Naroff, economist with Naroff Economic Advisors. “What more messages could you get that this economy is turning (and) that you should start doing things? And instead, they’re running around like Chicken Little.”

Clueless media droning to the contrary notwithstanding, it’s not surprising at all. A new employee is like an iceberg: The public numbers — salary, benefits — are only about 10% of the true costs once you factor in the tangled web of government regulations and mandates (which is not a trivial exercise). Also, in the Obamanation, there is no predicting what sort of she-it will be coming down the pike in the near future; Obamacare is just the first blast of the trumpet. Employers are like anybody else, they wait for things to settle down before they take a step.

As a result, businesses that want to expand are attempting to do so as much as possible in ways that don’t require adding headcount — this means increased automation, putting tools in place that will make existing employees more productive rather than just throwing bodies at a problem in the traditional way.

Modern software systems make this increasingly easier. The ability to have a machine do it rather than a person is expanding as the machines become vastly more capable. People are less and less working the assembly line and more and more supervising the production process and doing exception management.

2 Responses to “Why Companies Aren’t Hiring”

  1. Dennis Nagle Says:

    And besides, why add jobs here when you can do it in Mexico and Sri Lanka, where you can pay peanuts and dump your crap in the river where the folks downstream have to worry about it instead of you?

  2. Tim of Angle Says:

    An assertion for which neither evidence nor argument is presented. Thank you, Mr Democrat.