Employees Are Satisfied With Their Jobs: Or Are They?

How do your employees feel about their jobs? For a small business owner, the answer to this question is crucial. Employees who are happy at work and passionately engaged with their jobs are more loyal to their employers, more productive and just plain better for your business.

small business employee

A recent study of employee job satisfaction and engagement has some useful insights for entrepreneurs. The Society for Human Resource Management’s 2011 Job Satisfaction and Engagement Research Report, which surveyed companies of all sizes in late 2011, found that while more than 75 percent of U.S. employees are satisfied with their jobs overall, there are some key areas of dissatisfaction.

Paying attention to these areas could mean the difference between keeping and losing valuable workers.

A whopping 83 percent of U.S. employees said that overall, they are satisfied with their current jobs. SHRM vice president for research Mark Schmit notes that in general, this percentage hasn’t changed significantly in the last 10 years. Schmit says:

“In general, people find ways to be satisfied at work.”

But while you might think that in a tough job market, people would feel that just having a job at all is reason to be satisfied, in reality the percentage of satisfied employees has decreased slightly since 2009.

One key area where employees are less than satisfied is career development. Only about 40 percent of respondents say they are satisfied with the career development and advancement opportunities at their current jobs.

For the first time, the survey also looked at employee engagement. Engagement differs from satisfaction. While satisfaction depends primarily on job security, engagement measures how committed employees are to the workplace and how connected they feel. When it comes to engagement, there’s room for improvement. Just 52 percent of employees feel completely engaged at work; only 53 percent say they enjoy going above and beyond what their jobs require.

While these aren’t horrible numbers, I’m sure you agree that having all of your employees fully engaged in their work is the ideal state. So how can you improve things?

Schmit theorizes the disengagement is because employees feel they aren’t being groomed for the future:

“Employees seem to be saying, “I’m not getting training or opportunities for development, so why would I volunteer to do extra things to advance my career by helping out the organization?”

Small business owners often worry that the only thing their employees care about is raises and other financial rewards—which are tough for a small business to offer in this economy. The good news from the SHRM findings is that training and advancement opportunities are easier to offer.

True, you may not have immediate advancement opportunities for employees. But you can offer training. Here are some ideas:

  • Cross-train employees so they learn new skills. This also benefits your business, since employees can fill in for each other when there’s an absence or vacation.
  • Set up informal mentorships where more experienced employees show younger ones the ropes.
  • Look into free or low-cost training and education programs at local community colleges or adult education centers.
  • Meet with employees to figure out their career paths. As a small business owner, you have more flexibility to design jobs that take advantage of your team’s skills and desires.

Are you worried that you’ll institute training efforts, only to see those employees leave for greener pastures? Dissatisfied employees will leave when the job market improves—whether you’ve trained them or not. Then you’ll have to train their replacements. Isn’t it better to invest the time and effort in the employees you have now and keep them on your team?

Engage with your employees, and their engagement will increase, too.


Employee Training Photo via Shutterstock

From Small Business Trends

Employees Are Satisfied With Their Jobs: Or Are They?

View full post on Small Business News, Tips, Advice – Small Business Trends

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How Many Jobs Do Small Businesses Create?

How many jobs do small businesses really create? It has been an important question in the small business community for some time now ever since Washington started touting small businesses as the engine of economic recovery. Critics hit back with some conflicting figures, but it all comes down to the way we ask the question. See more discussion of this and other important small business news and tips in our small business roundup below:

News & Trends

How many jobs do small businesses create? Depends what “small” means. The title tells the whole story. If you want to say that small businesses create most new jobs, you use the number 500 employees. If you listen to the number the European Union uses, less than 50 employees constitutes a small business. Bloomberg BusinessWeek

Small businesses lead the way in green technology innovation. SBA reports that small businesses lead the way in the use of green technology. One of the methods used in determining this is through the amount of patent activity and how much of this activity is in the green technology field. These same companies that are working in the green technology field are found to be more profitable overall. PR Newswire

Better Business

Make things happen. You can never sit back, do nothing and expect to get ahead. The only way to be successful is to make things happen. Even a good education doesn’t guarantee success. This post looks at the success of one entrepreneur who was not afraid to take a risk. You’re the Boss

“Talent magnet” reveals the truth about the new job market. In the new job market, there are new guidelines and there are new techniques to be used in the hiring process. in a small business you may have to be satisfied with 90% of what you want and trust the other 10% will fit in. Specialization is the key because more and more small businesses are looking for people who will have an immediate impact. BusinessNewsDaily

Policy & Strategy

Generous small business tax deduction is shrinking. The deduction for equipment used by small businesses is being lowered from $500,000 to $125,000 next year. This deduction can be taken up front rather than being depreciated. Further reductions in these deductions are scheduled for future years. The other deduction that is being curtailed is the bonus depreciation which allows employers to deduct more than the amount normally allowed. This is being cut in half next year. Boston Globe

Five lame excuses for a company strategy. What exactly is company strategy? The simplest answer quoted is “you know what you are doing and why.” Strategy is making choices about what you will do and what you will not do. In small businesses many heads either just have something on a piece of paper so they can say they have one or they do not use what they do have. Forbes

Tips & Tricks

Why does your small business need social media? You’ve heard the buzz and, of course, we’ve reported on it here on Small Business Trends but the question continues to be asked by many. Is social media really worth the time and effort that small businesses must put into it to create a success? Yes, say some advocates. Here’s more on how top get started. CBC News

Not really a sales person at heart? It’s common problem for many entrepreneurs, especially when starting out. Fortunately sales doesn’t have to be rocket science. Here are some pretty simple approaches for those of us non-salespeople who need to learn the ropes for our own business in a hurry. Buzz Small Business Magazine

Marketing

Getting back into the conversation. If you’re not talking to your customers, your business could be in trouble. This might be common sense to most entrepreneurs and small business leaders, but did you know that it is also important to have the right conversation at the right time? Here are some ideas to consider. Partners in Excellence

Twitter tricks to get your site noticed. It’s no secret that Twitter has become a major small business tool. But are you using this incredible microblogging platform to its full effect? Twitter can be a huge help when marketing your small business online. But you must know how to make it work for you.Birdie’s Typing Services

From Small Business Trends

How Many Jobs Do Small Businesses Create?

View full post on Small Business News, Tips, Advice – Small Business Trends

10 Unfair Myths Bitter Nerds Will Eventually Spread About Steve Jobs

Unless you’ve been living under a rock for the past month, you’ve undoubtedly heard about the death of a computing icon, a man who changed how we interact with the virtual world forever.  I’m talking, of course, about Unix creator Dennis Ritchie.  Just kidding, odds are the first time you heard Ritchie’s name in a sentence was recently, and the sentence had more mentions of “Apple”, “Steve Jobs”, uncapitalized “i”s and the phrase “and also Dennis Ritchie” than “Unix”.

During his life, Steve Jobs was no small source of contention among nerds, and the Mac vs. PC debate raged for year after incomprehensibly rage-filled year (oh by the way we’re talking about Steve Jobs, he’s the one who died in case you missed that).  So undoubtedly, once the near-beatifying mourning of Jobs dies down, these same people will begin to whisper a whole slew of critiques of Jobs.  Some will be honest and well-reasoned, but this is the Internet so the majority will probably be loud, not very nuanced, and unfair to Jobs.  Some critiques such as:

Tablet Computers Pre-Date the iPad by Decades

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What They’ll Say:
The concept of a tablet computer is by no means novel at all.  In fact, the first patent for a tablet that electronically recorded handwriting was filed in 1888, barely more than a decade after Thomas Edison first demonstrated his incandescent light bulb.  And even as far back as 1992, IBM was releasing fully-functional tablet PCs as part of the ThinkPad lineup.  Of course these early versions didn’t have the power or functionality that current technology can offer, but all Jobs did was take a half-step forward based on almost a century’s worth of work by other people.

Why It’s Unfair:
No less a great mind than Sir Isaac Newton once said, “If I have seen further it is only by standing on the shoulders of giants.”  In a word, no innovation occurs without building on millennia of effort that preceded it.  But most importantly for the iPad, it wasn’t the tablet technology that came before it, it was the technology the grew alongside it, most importantly the internet and Wi-Fi.  No matter the power of the processor or the amount of memory in a tablet, if you have to plug it in, its fundamental purpose is negated.  Tablets were envisaged as early as 1968 in 2001: A Space Odyssey as tools of convenience, not workhorses, as we see a character use a tablet to watch a video message while eating his dinner.

So yes, Jobs didn’t exactly re-invent the personal computer with the iPad, but he did recognize that this oft-failed concept was finally at a point where it could be made feasible, at a time when the market for tablets had been dry for almost a decade.  Not giving Jobs credit for gathering the knowledge of the preceding decades and distilling them into an elegant framework because a similar concept had been done before is like not giving Newton credit for creating calculus simply because Leibniz came up with something similar at around the same time.

The iPod is Just a Fancy MP3 Player, Not a Fundamental Innovation

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What They’ll Say:
The product that really brought Apple into everyone’s side pocket was the iPod, but what’s so special about it?  Sure it allowed you to play MP3s and ditch the pile of CDs you used to carry around, but so did a lot of other products in the market at the same time.  And a lot of those were cheaper, more versatile, and didn’t force you to go through proprietary Apple software to get music on your device.  The iPod won this war simply because it had the sexiest marketing campaign, not because it was the best value.

Why It’s Unfair:
Raise your hand if you owned an MP3 player before 2001.  Now explain the process by which you loaded music onto it.  Now explain how in the world you expected that to fundamentally replace a system where you put-a-thing-in-a-thing and press play.  The problem with MP3 players wasn’t sexiness or even technology; it was getting the digital files from the record producer to your device.  This involved a whole host of technological savvy and legal issues which Apple solved not by making the iPod, but making iPod stupid-simple to sync and (later) the iTunes store, respectively. Though it certainly didn’t hurt that they had some amazing advertising.

Apple’s Computers Haven’t Changed Personal Computing Since the 80s

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What They’ll Say:
While all of Apple’s shiny portable products are nice, the truth is that you still do the vast majority of your day-to-day work on either a PC or a laptop.  No giant capacitive touch screen is going to change the fact that you can type a lot faster on a keyboard.  The personal computer forms the great spine of any productive worker (or particularly productive procrastinator), and Apple hasn’t made any great contributions to the field since the 80s.  Sure the iMacs are pretty and all that, but there’s simply no denying the fact that they’re over-priced, underpowered devices for people who don’t know enough about computers.  Steve Jobs’ greatest contribution to Apple before 2001 was little more than designing a computer that didn’t come in a beige box.  Bravo.

Why It’s Unfair:
No matter how impressive the specs or price of your computer, if you’re shipping a product with features that a majority of your users are nigh-incapable of accessing, that’s riddled with problems that require specialized training to address, you’re shipping an over-priced, under-powered product.  What a customer can do with your product is the ultimate test of how powerful it is, not the processor speed or memory size.  And by the ease-of-use measure, iMacs come out far ahead.  Of course this isn’t to say that someone with proper knowledge can’t do more with a high-powered PC than a Mac, but we’re talking about the average user.

But the far larger and more important point is that Apple didn’t have to revolutionize the personal computer market.  PCs are already insanely cheap, Windows XP wasn’t that bad, and, to a certain extent, most people have acquired the working computer knowledge to address basic bugs and open Excel.  All iMacs did was fill a niche of people looking for an easier and (yes) more eye-pleasing less intimidating PC.  Asking why Steve Jobs focused on mobile devices and didn’t bother to create a better computer is like asking Henry Ford why he made the flashy, expensive automobile instead of a faster horse.

Dennis Ritchie Did More Than Jobs, but Jobs’ Death Overshadowed Ritchie’s

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What They’ll Say:
Among other things, Dennis Ritchie created the C programming language and the UNIX operating system.  To put it simply, Apple may have made your phone, computer and MP3s, but code written by Ritchie are in virtually every complex electronic device you own.  And it’s likely Ritchie’s creations will continue on in some form for decades.  What’s more, Jobs operated a greedy, extremely private corporation that pursued numerous lawsuits when competitors got even remotely close to Apple’s technology.  In contrast, C and Unix are open-source, and have been used as a powerful resource for entrepreneurs and amateurs alike.  Jobs may be the name everyone remembers, but Ritchie had a much larger impact, and should have received a little more publicity.

Why It’s Unfair:
Ritchie was an academic and an engineer.  Jobs was a college drop out and an entrepreneur.  Jobs was a perfectionist, megalomaniacal CEO with billions of dollars to his name who deliberately sought the spotlight.  Ritchie was, by all accounts, a quiet, humble man.  Jobs shut down Apple’s philanthropic giving in 1997 and never restarted it.  It has also been reported that Jobs kicked way more puppies than Ritchie.

Comparing the two is like comparing oranges and (ahem) apples.  You can set up the same sad dichotomy by comparing just about anyone famous with a lot of people who actually contributed something and no one’s heard of.  In an ideal world, Ritchie would be the icon and Jobs would be the greedy capitalist, but in the end it still doesn’t diminish the fact that Jobs made substantial contributions to technology.

iTunes is Awkward and Propriety, Making it Difficult to Hold On To Music

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What They’ll Say:
If you own an Apple product, you are forced to use iTunes to get your media from your computer to your device.  Sure, you can download podcasts and load a fair amount of third-party content on there, but you still have to use Apple’s software every step of the way if you want to play it.  Any apps have to be specifically approved by Apple, leading to a media experience greatly out of the hands of the end user, and that’s the way Apple likes it.

Why It’s Unfair:
Years from now when you’re explaining to your grandkids that yes, at one time all media was sold and held in physical form by the end user.  And in much the same way you once asked your parents when was the first time they bought a CD instead of a cassette, your grandkids will ask you when was the first time you downloaded a song.  Most of us will not tell them the truth (Kazaa), but will instead tell them about the first time we downloaded music was from iTunes.  Apple may be annoyingly guarded in what software and hardware will work with their devices, but they (along with others) fundamentally changed the way media is distributed, and—more importantly—proved that in an era of pirating lawsuits, that it could be done profitably.

On top of this, Apple has inspired several copycat devices and marketplaces among all their major competitors, almost all of which are much more open and forgiving of customization.  Henry Ford insisted the original Model T would only be sold in black, and then his competitors made them in all sorts of colors.  Attacking Apple for an authoritarian but highly functional model is like attacking the Model T because it only came in black—it still worked well and ended up changing the world.

The iPhone and iPad Are For Movies and Games, Not Work

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What They’ll Say:
Let’s be honest, the iPad is basically a more expensive, less useful netbook.  They’re pretty and eye-popping, and most importantly of all, you can read them while eating cereal at the same time.  The iPhone is bright and flashy, but typing anything longer than a few sentences on a touchscreen is exhausting and frustrating.  Giving Jobs credit for a “revolution” in these devices is shiny-object salesmanship: he didn’t fundamentally make them better, he just made the brighter, flashier, and more fun.

Why It’s Unfair:
It turns out that all the moaning that came with the switch from keyboard to touch screen was largely unfounded, as recent studies show that the average user can output around 33 words per minute on the touch screen—just a hair below the average for keyboards.  Some can even get up to 80 words per minute.  On top of this, the larger screen allows you to read e-mails, presentations, photos etc… on a screen that doesn’t cause eyestrain.

But the most important part here is that, especially for the iPhone, any work you do on it is work done during time when you would usually not be able to do this work (since you didn’t have access to a computer).  And say what you will about the iPad, it’s bright, crisp screen and smooth lines are a lot more inviting than a giant lumpy textbook.  Which is exactly why more and more educational institutions are using them as tools to entice children to read and play educational games, as well as a way for students to communicate with teachers and store all their academic work in one place.  Oh and they’re also great tools for our rapidly aging population and the visually impaired.

He Tried to Strangle Apps

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What They’ll Say:
The biggest beef that nerds likely have with Jobs is his enmity toward open-source.  To the independent developer, Apple is the tallest, most lucrative fortress with the most impenetrable walls on the planet.  Everything is developed in-house under Jobs’ watchful, perfectionist eye, any third-party apps have to go through a rigorous approval process, and Apple gives only piecemeal, begrudging support to developers.  Jobs’ attempt to stop the App Store is viewed as one of his few professional mistakes, even by his fans.

Why It’s Unfair:
Most people seem to forget that every iPhone comes equipped with a button that takes them to the Internet, a world filled with all of the smut and apps you’d like — none of it restricted by Apple, and this space is only getting bigger and more capable.  More and more, it’s getting harder to distinguish what content is based on your browser.  Jobs realized this, and his resistance to the App Store seemed to come less from the fact that he didn’t like third-party development on the iPhone, it’s just that he wanted it to be done in the cloud.  Those of us who don’t live in Cupertino and have experienced the hellacious nature of AT&T’s network can attest that, while a noble idea, going completely to the cloud simply isn’t feasible yet, though Jobs was probably only a few years off (after all, without apps, how would we play Angry Birds on the subway?).

He Contributed to the Myth of the Silver Bullet CEO

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What They’ll Say:
In an era where Americans are particularly…perturbed at the growing economic inequality in this country, where CEOs make 475 times the average worker, here comes Steve Jobs perpetuating the myth that all a company needs is a magical CEO to save them.  These CEOs demand exorbitant pay, rarely pan out, and then take millions in golden parachutes. Steve Jobs was a visionary CEO for his company, but his visibility will only make corporate America’s views on management more perverse, tyrannical, and full of magical, short-term thinking.

Why It’s Unfair:
Steve Jobs’ salary: $1.  Of course he makes millions a year in stock appreciation and has numerous other investments, but Jobs was part of a growing club of CEOs that take only a small, symbolic salary and draw all of their income from the company’s growth.  While this may seem like an empty gesture, let’s say that, theoretically, Jobs demanded the salary of $33 million including bonuses that Ray Irani of Occidental Petroleum does.  With that money, he’d essentially be depriving Apple of more than 400 talented engineers making around $75,000 a year.  For some perspective, the average firm in the US employs roughly 16 people.  Jobs may be the quintessential magic CEO in most peoples’ minds, but if more CEOs were like him, outrageous CEO pay wouldn’t be a problem in the first place.

Outsourcing Products to Foxconn

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What They’ll Say:
Apple’s relationship with Chinese supplier Foxconn is storied and gruesome.  In addition to the high-profile suicides a few years ago, stories emerge of 34-hour shifts and employees so young that their hands become mangled and twisted as they grow into the repetitive work.  Reports indicate that Foxconn only pays the equivalent of $300 dollars a month.  Despite all their clean, sexy, innovative flashiness, the iPhone was built on the pain and suffering of hundreds.

Why It’s Unfair:
First off, Jobs was a good CEO, not necessarily a foolhardy philanthropist who would inexplicably force his company to source products from factories that would drive costs several orders of magnitude higher than the competition.  In a word, outsourcing wasn’t his choice; it was made for him by the market.

In addition, at the risk of sounding like a heartless imperialist, Foxconn pays far better than the average Chinese job.  Plus Foxconn recently raised wages, and are seen as a positive force of upward wage growth in China.  While we should never get comfortable saying “they’ll take their slave wages and unsafe working conditions and like it”, and always pressure foreign and domestic suppliers to funnel profits into wage growth and better worker conditions—there is and will always be some dark underbelly to the world capitalism that we all support.  If this is your first time coming face-to-face with this fact you should also know that Santa Claus and the Easter Bunny aren’t real, and that the failings of capitalism can’t be laid across Jobs’ shoulders any more than they can be laid at the feet of everyone who bought an iPhone.

He Struck a Deal With the Devil Dealing with AT&T

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What They’ll Say:
When you hear complaints about peoples’ smartphones, they rarely complain about the operating system, the touch screen, or even the ergonomics.  The number one complaint is always about dropped calls, slow data speeds, and text messages that vanish into the ether, only to reappear about 8 hours later along with 4 to 5 copies.  For all the perceived faults of Apple, their product is streamlined, reliable, and does what you ask it to.  Meanwhile, AT&T and other telecoms have responded by throttling data plans and continuing to charge exorbitant rates for services as basic and inexpensive as text messaging.  Jobs clearly believed in cloud-based services as an end-game, so why did he sell his soul through an exclusive deal to a company whose profit structure depends on throttling everything that makes the iPhone valuable?  Wouldn’t it make more sense to offer it up on all major carriers to encourage competition?

Why It’s Unfair:
The short answer is basically US networks couldn’t handle the iPhone’s increased data demands, and Apple needed a carrier willing to build out the network improvements necessary to support the phone.  You may complain about how long it takes to load your joke-a-day column each morning, but before 2007, even decently fast Internet on your phone was a laughable pipe dream.  You know how when your phone (if you have AT&T) loses a good data signal, displays the dreaded “E” and speeds drop to next to nothing?  Before the iPhone, no network had even that lumbering speed.  Yes the way in which Apple went about this was annoying to those who were locked into two year contracts with other providers, and yes there might have been some shady, under-the-table kickbacks going on.  But Apple pretty much single-handedly forced some of the biggest improvements in network infrastructure in a decade.  Far from a deal with the devil, Apple essentially told the devil “Okay we’re gong to make this deal, but in return you have to be slightly less of a dick”.

You may think Steve Jobs was a greedy megalomaniac, but there’s little doubt that he knew what he was doing and did it well.  In a time when Americans are near-desperately searching for fast-fading examples of American exceptionalism, Steve Jobs was one of the few that really remained.  In the years to come his life, business and management style will undoubtedly become the subject of many studies and books.  Most of us can’t really touch the unfolding narrative of Steve Jobs, but maybe after this article some of the comments on blogs will be a little less petty and asinine.


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With the Passing of Steve Jobs, America Longs for the Next Innovator-in-Chief

President Obama’s $447 billion jobs bill hit a roadblock as Senate Republicans led the vote against the measure. The proposal would enact a 50 percent payroll tax cut, create an “infrastructure bank” to fund construction projects, and fund job-training initiatives for returning veterans. While some elements of the bill are agreeable to Republicans, many of them take exception to the plan to levy a 5.6 percent surtax on incomes of $1 million or more.

Steve Jobs

The President has made job creation a priority, as well he should. The economy has been stagnant for most of his term, and unemployment is higher now than in January 2009, when Mr. Obama took office. He knows well that small businesses are the drivers of job creation and that if they are not successful there will be little growth in the economy.

If nothing else, the sheer process of elimination forces his hand. At a time when the electorate is demanding smaller government and reduced spending, there is little chance of creating large numbers of public sector jobs. Corporations have weathered the recession by becoming leaner and meaner. They increased productivity and then were rewarded with strong profits. Large companies are doing more with less, so don’t look for corporate America to make lots of new hires. That leaves small companies as the remaining option for job creation.

Historically, this has always been the case. America is an entrepreneurial country and will continue to be so. We don’t know who will replace Steve Jobs as the country’s “Innovator-in-Chief,” but someone — perhaps in a garage in California or at a home office in New York — is today laying the groundwork for the next great American company.

Technology makes it easier to start a company than ever before. There is no shortage of people wanting to work, and believe it or not, there are financial institutions wanting to lend. While big banks are rejecting more than 90 percent of small business loan requests, increasingly, local banks and alternative lenders, such as credit unions and microlenders, are filling the void. These institutions are more than four times as likely to approve small business loan requests as big banks are.

It may very well be that the next Google, Starbucks or Apple will be funded by an SBA loan from a local bank, a credit union, or a microlender such as ACCION, which offers business loans up to $50,000 to empower business owners with access to working capital and financial education.

Small business development is the most likely route to economic growth. The President and many economists are banking on it.


Image from Annette Shaff/Shutterstock

From Small Business Trends

With the Passing of Steve Jobs, America Longs for the Next Innovator-in-Chief

View full post on Small Business News, Tips, Advice – Small Business Trends

Count Them: 5 Tax Benefits of The American Jobs Act

In a speech to the joint session of Congress on September 8, President Obama laid out his plan to spark the economy and put Americans to work with the American Jobs Act. This jobs bill contains several tax initiatives and incentives to promote investment, and hiring in particular. The President also wants to send billions to help states keep teachers, emergency workers and others employed and fund approximately $50 billion in infrastructure projects.

U.S.A. Piggy Bank

The plan is targeted more at small businesses than at large corporations – which may reflect the administration’s thinking that big companies have bounced back from the financial crisis more successfully than smaller businesses have.

These initiatives require Congressional approval. And while the President is making his case throughout the country with enthusiastic rallies and “Pass this Bill!” chants, even the savviest political pundit can’t predict how exactly this will play out.

If you’re a small business owner, the impact of the American Jobs Act may be significant. Here’s an outline of some of the initiatives you should be tracking over the coming months:

1. Payroll tax cuts: The plan cuts the employer share of payroll taxes to 3.1 percent on the first $5 million in wages. According to the White House, this tax cut would benefit the 98 percent of businesses with wages below $5 million. By halving the payroll taxes on the first $5 million, the President hopes to stimulate job growth among smaller companies.

In a U.S. News & World Report article, Todd McCracken, president and CEO of the National Small Business Association, was quoted as saying: “The impact of payroll tax cuts is fairly substantial. It gives [businesses] the cash flow that they need to think about expanding. If they’re thinking about hiring, it’s going to make it more affordable for them in the near term.”

2. Payroll tax holiday: The plan would eliminate the entire 6.2 percent payroll tax on any increase in payroll (for added workers or increased wages) up to $50 million above the prior year.

3. Extend 100 percent expensing into 2012: Companies can fully depreciate certain purchases in the first year (instead of having to amortize these purchases over as long as 20 years). The goal here is to encourage new investment.

4. Tax credits for hiring the long-term unemployed: The plan proposes a $4,000 tax credit for any business that hires an individual who has been unemployed for at least 6 months. And considering that a recent review of job vacancy postings on sites like Monster.com by the New York Times revealed that employers have a strong preference for people who are still employed or just recently laid off, the long-term unemployed need all the help they can get.

5. “Returning Heroes” tax credit for hiring veterans: If a company hires a veteran, the tax credit increases to as much as $5,600, and reaches $9,600 if the veteran became disabled in the course of serving. Unemployment rates among veterans are truly shocking (13.3 percent), so most would agree with the idea of encouraging the private sector to hire or train our veterans.

Of course, since the initial framework of the plan was first revealed, many in the small business community have expressed their disappointment that the plan doesn’t address one of the biggest challenges facing small business success and growth: the difficulty startups and small businesses face in securing credit from banks.

And here’s where one of the more compelling initiatives from the Administration comes in. The White House plans to ask the SEC “to reduce the regulatory burdens on small business capital formation in ways that are consistent with investor protection, including expanding ‘crowdfunding’ opportunities and increasing mini-offerings.”

I know that many are skeptical of Washington’s ability to help the private sector. But the potential to get money flowing to startups and Main Street businesses could be a game changer. Small businesses should closely monitor the progress of the above proposals over the course of the next few months.


Image from Mishchenko Mikhail/Shutterstock

From Small Business Trends

Count Them: 5 Tax Benefits of The American Jobs Act

View full post on Small Business News, Tips, Advice – Small Business Trends

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Is the American Jobs Act the Right Course for Small Business Growth?

While President Obama urged Congress to pass his $447 billion jobs bill combining tax cuts and new government spending, skepticism remains as to whether the package could kick-start the stalled economy and if it would indeed pay for itself as the President promised.

President Obama’s “American Jobs Act” proposals include a 50 percent cut in payroll taxes, incentives for businesses to hire returning veterans and people who have been unemployed for more than six months, and new spending on America’s infrastructure. The President said that the proposals would not increase the growing federal deficit, and that he has ambitions for long-term deficit reduction through spending cuts.

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Although the President’s intentions are good, the plan is unlikely to have the intended effect and may not even pass Congress. The plan is well intentioned, but a little off the mark.

  • The number-one issue right now is empowering entrepreneurs to start small businesses. To do that, they need capital. but banks simply aren’t lending. Many big banks have reserves on their books. President Obama should take a page out of Ronald Reagan’s 1987 playbook and vow to increase taxes on assets that are sitting idle if the banks do not reach certain small business lending plateaus.
  • Although the President insisted that his proposals would pay for themselves, he did not say how. There is a high likelihood that the measures will add to the growing government deficit, which puts a burden on the economy and small businesses in particular.
  • When government revenues don’t match its spending, it looks to increase revenue. My fear is that small business owners will suffer. Entrepreneurs don’t have lobbyists like big corporations do and thus are less likely to sway government leaders against taxing their businesses.
  • Providing incentives for hiring returning soldiers is a worthy and sincere aspiration. However, the reality is that many veterans do not have the job skills to compete in today’s technology-driven economy. Any proposals should include some sort of training for veterans so that they can develop marketable skills – a 21st century G.I. Bill, so to speak. When people have skills they get hired. The same applies to long-time unemployed workers.

There are three things the President should have suggested, but did not:

1. Provide ncentives for small business lending. Tax incentives for hiring are nice, but if you don’t have capital to launch the business, they do no good.

2. Encourage foreign direct investment into new businesses. China has been very good at this. New companies create jobs.

3. Focus on reducing the deficit, which is a time bomb. Who will be most likely to pay the piper? Small business owners, who don’t have lobbyists and are an easy target for higher taxes and increased fees. (It won’t be the poor or the big corporations that pay.) A large government deficit limits access to capital for the private sector in general and small businesses in particular, as they do not have access to public markets. The deficit is exactly the opposite of what small businesses need to help bring America out of its stagnant economy.

President Obama is correct in saying, “Ultimately, our recovery will be driven not by Washington, but by our businesses and our workers.” In order to do that, small businesses need an environment in which they can grow. He also was right when he admitted that people cannot wait 14 months until the next Presidential election for the economy to turn around. While the new measures would likely spur employment (currently at 9.1 percent) and some growth, they are not enough to solve the country’s economic woes.

From Small Business Trends

Is the American Jobs Act the Right Course for Small Business Growth?

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What Really Needs to Happen to Create Jobs?

The most recent June employment figures were disappointing, to say the least. But does the blame for feeble job growth lie with business, or with government? Currently, while both sides seem to agree on a lot (at least in theory), there’s a lot of finger-pointing going on and not a lot of action.

The Jobs for America Summit 2011, held at the U.S. Chamber of Commerce earlier this month, illustrates the divide. The U.S. Chamber of Commerce recently released a survey of its members that puts the blame for lackluster job growth at Washington’s feet. The vast majority (84 percent) of surveyed members think the U.S. economy is on the wrong track, and 79 percent believe Washington should get out of the way of small businesses, instead of offering a helping hand (14 percent).

downtrodden businessman

At the Jobs Summit, CNNMoney.com reported, Chamber President and CEO Thomas Donohue explained the organization’s ideas for helping create jobs. Among the policies the Chamber supports are:

  • Passing pending free trade agreements with South Korea, Colombia, and Panama
  • Reforming current visa rules so it would be easier to hire skilled workers and others from overseas
  • Invest in infrastructure
  • Boost domestic energy production
  • Promote travel and tourism
  • Easing government regulations, in particular the permitting of new projects

OK, so what does Washington have to say about job creation? The President’s Jobs and Competitiveness Council, comprised of 26 private-sector leaders led by GE Chairman and CEO Jeffrey Immelt, has been tasked with coming up with ideas to accelerate job growth and make the country more competitive. In June, Immelt co-authored an op-ed piece in The Wall Street Journal laying out the recommendations the Council had come up with in its first 90 days:

  • Train workers for today’s open jobs. “The private sector must quickly form partnerships with community colleges, vocational schools and others to match career training with real-world hiring needs,” Immelt wrote.
  • Facilitate small-business loans.
  • Streamline permitting so job-creating construction and infrastructure projects can move forward.
  • Boost jobs in travel and tourism.
  • Put construction workers back to work by having both public and private sector employers step up to make buildings more energy-efficient.

Long-term recommendations, which the Council will be fleshing out in the next 90 days, include:

  • Focusing on fast-growth companies and small business
  • Making America more attractive place for high-tech services and manufacturing jobs. Accelerating foreign direct investment in the U.S.
  • Improving infrastructure
  • Visa reform to enable more high-skilled immigration

I see a fair amount of overlap here, don’t you? In fact, the White House issued an executive order in July requiring agencies to remove outdated regulations that are hampering small businesses.

So what’s holding things back? At the Summit, CNNMoney reports, Immelt took business to task for failure to act:

“The people who are part of the business sector, the people in this room, have got to stop complaining about government and get some action underway. There’s no excuse today for lack of leadership. We all need to be part of the solution.”

But Donohue fired back. “Can you blame these businesses?” he told the audience. “They don’t know what’s going to hit them next, and that’s what worries them the most.” Almost half of all respondents to the Chamber survey said uncertainty about U.S. economy is one of the top three important challenges facing their businesses, and 55 percent cited it as their biggest obstacle to hiring.

What worries me the most? I see a whole lot of recommending and not a lot of action. Small businesses are all about action, and I think it’s time for businesses – large and small – to start moving forward again.

From Small Business Trends

What Really Needs to Happen to Create Jobs?

View full post on Small Business News, Tips, Advice – Small Business Trends