Yahoo! Finance
July 26, 2010

Five Mistakes Online Job Hunters Make

See the full article on CNBC.com

We mention a trend in our newsletter and the NY Times confirms it days later. For those who read our mid-year report, Nason & Nason is seeing hiring pick up and expects it to continue through 2010. This, along with moderate growth from the tail spin of the previous year, is creating demand and the beginning of an accelerating talent shortage. Candidate shortage is becoming quite evident in segments of the market that are not as regulated and in more robust economies such as Brazil. Better things are yet to come.

See the full article at NYtimes.com

The constant chatter from Washington about how they are going to help small businesses is like a sad joke with no punchline. Despite lots and lots of talk, quite the contrary is happening. Banks are not lending to small business in any meaningful way and they won’t.

In fact, contraction is underway, the effects of which will be shown in continued shuttering of storefronts and emptying offices. For small businesses today, success is measured in terms of survival.

What is so wrong with the government response? Let’s start with government incentives for small business, such as tax credits for new hires.

One has to be making money to take advantage of tax credits. You cannot subtract credit from losses.

Besides, who wants to take on new hires until there is some hope of a steady cash flow to pay for them?

SBA loans are easier to get — if you have real assets to pledge, and there are few business people who have property not already leveraged.

Why pay 5 percent more for the hassle of a government loan, if one can get a second mortgage for that property at half the rate? It makes good press but few are ever disbursed.

The government defines small business as up to $50 million in sales, but in this market, that is a pretty big company.

For most small businesses the major form of credit is the corporate credit card. These credits have been capriciously cut in half and if one still has this formerly dependable financing alternative, it is probably at 25 percent.

And these are the simpler problems.

The more serious issues have to do with the weak conditions of the banks themselves and the changing nature of the client-bank relationship.

By relationship I mean every man for himself and survival of the fittest.

If you are fortunate enough to have had a line of credit, it may be frozen or pulled. Community banks are under siege by regulators to get their portfolios and leverage under control. Washington adds to, rather than resolves, small business’ problems.

Further, the regulators are all over the quality of assets, which are now suspect since many small businesses are just now providing tax returns reflecting last year’s losses.

Even though the businessman has been repaying and is current, his assets have deteriorated. His losses have sucked up his cash and as he struggles to regain stability, lines are being cut and frozen.

The bank’s response? Sorry old friend, we are fighting for our own survival.

Weak banks may not make reliable partners. If one should choose to clean up a line of credit, there is no guarantee of getting it back.

This scene will be commonplace in the coming months and will exacerbate the problems of the weaker banks.

The new wave of credit problems is about to roll in and will hit much closer to home.

Recovery? Not quite yet.

Hopefully well-run businesses and professional practices can hold on until enough money sloshes through the system to surf to safety, but don’t expect much help from the government or your banks.

Article can be found on www.miamiherald.com

Yet despite all this, hiring has returned to financial markets and there is some room for optimism. We see signs of a strong job market in the later part of the third and fourth quarters of this year. In the longer term, there will be fundamental changes in the way financial services are conducted and where the business is to be transacted but in recent months banks and companies have been hiring. Hiring has been different than in the recent past in that admin and support jobs have been leading the way. Temp hiring continues to remain steady and somewhat, although not quite as, strong. One good sign is that 85 % of our temps are being hired for perm positions which is a strong indicator of demand. There are indications that more senior hirings are on the way especially for those that can produce revenues. What seems to have happened is that employers have held the strings very tight and squeezed productivity out of the staff, cutting back and forcing longer hours, shorter vacations, and pressuring management into doing their own clerical work as well as their required jobs. People are getting tired and the job market is beginning to ease up, opening up alternatives. This, along with moderate growth from the tail spin of the previous year, is creating demand and the beginning of an accelerating talent shortage. Candidate shortage is becoming quite evident in segments of the market that are not as regulated and in more robust economies such as Brazil. Better things are yet to come.