Obamacare Weighing Less on Hiring Plans

by: Michael Cohn
May 28, 2014

The effects of the Affordable Care Act may be weighing less heavily on the hiring plans of U.S. privately held companies this year, according to a survey of accountants who work with small businesses.

The financial information company Sageworks found that slightly more than half of accountants working with privately held businesses said that the ACA is making it less likely that their clients will hire in the next 12 months. That is a smaller percentage than Sageworks found in a previous survey it conducted last summer in which two-thirds of the respondents said the ACA was making it less likely that private companies would hire in the year ahead.

In addition, a slightly larger percentage this year predicted the ACA would have no impact on hiring in the next year. Of the more than 500 firms surveyed in April and May of this year, 19 percent foresaw no impact on hiring, 20 percent were unsure and 5 percent noted that the implementation of the ACA will lead to more hiring in the next 12 months.

Unless there are further delays, the employer mandate requiring employers with over 50 full-time employees to provide health insurance to full-time workers is scheduled to begin in 2015 for businesses with more than 100 employees and in 2016 for businesses with 50 to 99 employees.

“Private companies in the United States are continuing to grow at a healthy rate, and while planning for the Affordable Care Act is still impacting many businesses’ plans for hiring, it is causing significantly fewer businesses to slow hiring in the coming year in comparison to last year, which is positive," said Sageworks chairman Brian Hamilton in a statement,

Sageworks’ new survey also asked accountants about their business clients’ general hiring plans for the next 12 months. More than half said businesses plan to maintain their headcount. Just over 17 percent said businesses are planning to add employees, and 12 percent responded that businesses are planning to reduce headcount. In the summer 2013 survey, over 60 percent of respondents noted that their clients planned to maintain their headcount, and only 13 percent responded that businesses planned to increase hiring.


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