New Government Jobs Proposal

In January, the federal government unveiled a proposal to establish a $33 billion package of tax credits that would serve to encourage small businesses to hire more workers and increase wages. The proposal is part of a larger effort to spark a rosier trend in current unemployment rates throughout the country.

Under this proposed plan, businesses would receive a $5,000 tax credit for every additional new employee that they employ in 2010. The total amount of credit would be capped at $500,000 per business to prevent larger businesses from being eligible. Additionally, the proposal also calls for reimbursement in Social Security payroll taxes (up to the Social Security taxable maximum) to small businesses that they would otherwise pay on increases in payroll.

Should this plan be set in motion, your small business faces a decision: To hire or not to hire?

The answer might actually come in the form of another question: Do you need to?

While the proposed tax credit sounds appealing, if your small business is comfortably meeting demand or the current work load of employees is manageable, your business might not stand to benefit from the push to hire more workers. Don’t fix something that isn’t broken. Instead, consider focusing on maintaining and growing your customer base.

However, if you were considering hiring this year, this could be your incentive to seriously think about doing so. Or, if you see your small business growing in the near future, now may be the time to take things to the next level.

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The Job Market

Today’s workforce is extremely different from that of the past. Employers have changed their attitudes about work and its meaning in their lives. People are changing jobs and careers more than ever. Even the so-called “permanent” workers are changing jobs more frequently. Employees don’t view any job as permanent any more.

In a recent study, people now expect to change jobs many times over the course of their lives. Further, workers now on average change jobs every 3-5 years. Now, workers view their best career strategy as being a series of diverse assignments and experiences that broaden and deepen their skills. The word “job-hopper” is being replaced with “job matrix.”

One fact is becoming very clear in today’s economy: Employee loyalty to a company is now tied directly to personal job satisfaction and development skills.The Annual Report of the President’s Council of Economic Advisers states that,

workers are most likely to be satisfied with their jobs, committed to their employers, and productive at work when they have jobs that offer meaning, learning opportunities and flexible work arrangements that are responsive to individual needs.

This means that job characteristics and workplace characteristics are far more powerful predictors of employee outcomes on the job than pay and benefits. In Future work: Trends and Challenges for Work in the 21st Century, the U.S. Department of Labor reports that there is a continual, growing trend toward balancing the demands of work and family, as well as the need for training and skills.

Employees of all generations, Mature, Baby boomers, GenX, and Millennials, are seeking the following:

• Control of their short and long-term futures
• Balance of work and family time
• Meaning of work and the addition of substance and fun to their lives
• Simplicity of personal goals and clear life objectives
• Security, knowing that they are employable and capable of earning an income to support their life choices.

Any employer who can help with these employees’ needs, will have a thriving workforce in today’s tight labor market.

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