Small business survey finds pullback in hiring plans

Small businesses in the Chicago area are scaling back their hiring plans for 2020 while expressing greater concern about finding qualified applicants they can afford, according to a survey issued Wednesday by the Chicagoland Chamber of Commerce.

The annual Small Business Outlook Survey also turned up increased worries about taxes and regulations when compared to results reported in 2019.

The research covered a cross-section of business owners with fewer than 500 employees. It found 27% expect to add full-time employees in 2020 vs. 41% a year ago. There was a smaller drop in hiring expectations for part-time workers, with 33% expecting to do so compared with 36% in 2019.

It comes as many corporate leaders have expressed anxiety about pension debt of state and local governments and changes in Cook County property assessments that some believe will hit businesses. Looming in the background is a possible switch to graduated income tax rates in Illinois, a change that goes before voters in November and could lead to higher taxes on the wealthy.

“We are encouraged by Mayor [Lori] Lightfoot’s recent efforts to streamline the business license process and are hopeful additional measures will be taken to provide the tools, resources, and reform needed to support our small businesses,” said Jack Lavin, president and CEO of the chamber. “We also must be mindful that more than 56% of respondents are having a hard time finding qualified candidates, reinforcing the need for our region to launch and expand existing training programs to build our pipeline of talent.”

Overall, the business owners retained long-term optimism, with 57% saying they expect to expand in Illinois, down 4 percentage points from the prior year.

Regarding difficulties with hiring, many survey respondents cited a lack of candidates with needed skills, or applicants having salary and benefit expectations that were too high. The results could reflect persistently low unemployment rates that, based on economic data, are causing upward pressure on wages.

Loyola University Chicago’s Quinlan School of Business conducted the survey and BMO Harris sponsored it. A chamber spokeswoman said it drew 316 responses.

Compared with the prior survey, it found elevated concern about taxes and regulations, cited by 86% and 74% of business owners, respectively. But fewer were worried about health care costs, a worry of 77% of respondents compared with 88% the previous year.