Private companies, expecting revenue growth to soar far past that of gross domestic product (GDP), are in a hiring mode not seen since pre-recession days.

While various GDP forecasts for the United States call for 2014 growth of less than 3 percent, the average predicted revenue gain for the next 12 months, among 213 private companies surveyed by PricewaterhouseCoopers between January and April, was 8.5 percent.

Accordingly, 63 percent of the participating companies, whose annual revenue averaged $368 million, anticipated growing their head count. That was 11 percentage points higher than a year ago and the highest percentage reported in PwC’s quarterly Trendsetter Barometer in years. Likewise, only 2 percent of the companies were looking at reducing their work forces over the next 12 months, tied with the second quarter of 2010 for the lowest figure since 2008.  In the fourth quarter of that year, 17% of surveyed companies were eyeing staff reductions.

Still, in another sense hiring plans are somewhat measured, with staffing increases expected to average just 2 percent. Companies reporting plans to bolster head count had forecast greater 12-month-out increases than that in five of the previous seven quarters, topping out at 3.4 percent in the first quarter of 2013.

Most hires will be in three areas: sales, technology and “blue-collar” workers. “Hiring is very targeted,” says Ken Esch, a partner in PwC’s private company services practice, noting that while those three buckets are quite disparate, they have a common thread. “Hiring companies are expecting a quick turnaround on their investment. They’re looking for sales professionals who can access new customers quickly, people who can help them get better information out of the data they already have, and people who can jump into the manufacturing or production end and contribute within days rather than months.”

More companies that do business abroad (68 percent) expected to add workers than domestic-only ones (58 percent). By and large, companies that operate internationally have more aggressive growth agendas, spending more on plant, property and equipment as well as hiring, Esch says. There was a bit of a dip for multinationals in 2013, but overall the hiring gap between them and domestic firms has remained fairly consistent over the past five years, he adds.

Despite China’s well-publicized economic slowdown, 74 percent of companies that sell there planned to hire new workers over the 12 months after they were surveyed. Indeed, China is sputtering only in a relative sense: its GDP growth is expected to be the highest this year among the 50 countries for which research and analysis firm Trading Economics forecasts the economic indicator. “From a long-term perspective, private companies view China as a very viable market for their products and services as its middle class continues to grow,” says Esch.

Surprisingly, PwC’s report notes, companies’ hiring intentions and their concern about finding qualified workers don’t seem to be causing wages to rise appreciably. The average increase for hourly-wage workers this year was pegged at 2.7 percent, slightly trailing the 2013 level.

“Our surveys have told us consistently that concern over a qualified work force has been a barrier to growth,” Esch says. “Companies have focused first on maintaining the work force they have — not always with wages, but also with benefits, flexibility on time and location of work, and internal training.”

Meanwhile, although private companies are hiring and expecting growth, they’re retrenching on capital expenditures this year. Those surveyed said they were planning on capex spending of 6.6 percent of sales, versus 7.5 percent in 2014. In only two major expenditure categories — information technology and new products and services — did even a quarter of them expect spending increases.

“It’s probably a bit early to declare a trend here,” says Esch. “A lot of companies invested heavily, in technology in particular, coming out of the recession, which seems to be paying off right now. Perhaps companies are taking a bit of a breather as they contemplate the next phase of their growth agenda.”

As the PwC report notes, “It appears [that companies] are spending less aggressively because they can afford to be less aggressive.”

, , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *