|
uncertainty about upcoming cuts or increases, and uncertainty about other things. Most places I've worked (small to huge) look at the cost of a new higher 3+ years down the road. The first year matters, but there's extra cost for onboarding (HR, security, headhunter's cut, equipment, training,...), and less productivity because of the learning curve for the new hire. As a manager I have to eat those costs the first year but that's ok if the employee stays for a few years. That means I need to budget for that employee's cost over at least a few years.
If I don't know the multi-year costs, it's harder to justify a new hire. I don't want to have to fire anyone because taxes reduced our budget or health care increased employee cost beyond our budget.
If I think costs may go up significantly I need to offer a smaller salary so I have some in reserve in my budget for future years. And offering a small salary is likely to make that employee leave sooner so there's a risk that I won't recoup my upfront costs. So it's much better to wait until the results of the health insurance reform are better know. And until I know what's going on with Bush's tax cuts. And what's going on with the energy bill (if it costs more to operate our plants then company profits are down and my budget is likely to be cut). And if I were at a small company now I'd have to worry about going over the thresholds that trigger new health care regulations.
Temp workers and outsourcing are a much better option when future costs and taxes are in doubt. Even known high taxes and high benefit costs are better than unknowns when it comes to permanent employees.
|