The Real Deal: Obama’s Jobs Plan VS Your Hiring Needs

Obama’s new jobs plan has been hogging most of the headlines lately, so what does it really mean for small businesses? Should you be starting a flurry of hiring, or perhaps not just yet?

Last month unemployment rates rose in most parts of the country. While the nationwide unemployment rate remains at 9.1% it is certainly much worse than that in many areas. Nevada’s sits at 13.4% with California just behind it at 12.1%. Of course this only accounts for a portion of the true number of unemployed people, which could easily be double that. Clearly as a small business owner there are plenty of staff to pick from and you will likely be able to pick them up extremely inexpensively.

The jobs plan unveiled in Obama’s recent speech laid out several proposed tax incentives for businesses who hire American workers. So if passed should you be jumping on it and hiring everyone you can while you can get a tax break?

If you already have hiring needs and are actively seeking new staff members then it may pay to try and take advantage of any tax breaks you can get. However, hiring just because of potential tax breaks may not be a wise move. You certainly don’t want to take on any full time staff you don’t need and bury yourself under more overhead. Plus you must factor in the true cost of having your CPA decipher the tax law and see if you are really even eligible, then pursue your credits.

Being patriotic and hiring American workers can be noble and commendable. However, if it means crippling your enterprise or losing your competitive edge it will leave you without the ability to help anyone, including yourself and your own family. Hiring local workers can come with a lot more cost than just the higher wages they demand. It often means paying them for unproductive work hours, time off and incurring the risks of many different types of law suits which can crush your business.

In contrast outsourcing is normally a much wiser move, which brings lower labor costs, often more qualified and talented workers, certainly more motivated team members and a lot less risk. It really means only paying for what you need and no more and getting the best possible ROI. However, if you can hire remote US based staff then you may be able to get the best of both worlds.

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