SMB Job Generation Outlook

1. Q2 2013
SMB Job
Generation
Outlook

2. 1 | SMB Job Generation Outlook Q2 2013
The Lucas Group Job Generation Outlooks is an innovative approach to traditional hiring and employment
surveys, gauging both recent and planned activity in the United States small to mid-sized business market.
This, our third quarter national survey of SMB presidents, CEOs and business owners, examines executive-
level perspectives on critical issues facing the American SMB marketplace, including economic developments,
employment trends, legislative initiatives, political environments, and the tangible impact these issues have
on business and employment planning.
Conducted in coordination with Polaris Marketing Research and Dr. Goutam Challagalla, Associate
Professor at Georgia Institute of Technology College of Business, the SMB Job Generation Outlook is the
only economic and employment survey that captures timeless trends – directly from the visions and priorities
of the highest executive offices.
Quantitative results and key findings from the SMB Job Generation Outlook survey were analyzed, and
through a series of graphs and charts, the statistical relationship of trends in the small to mid-sized business
market has been illustrated. A detailed narrative of the data analysis follows the illustration on page 9.
Lucas Group will continue the SMB Job Generation Outlook survey on a quarterly basis via online surveys
with invited top executives from a variety of SMBs around the country and across industry segments.
The Lucas Group survey is set to become the outlook standard for the American SMB market, heralded in
American discourse as the jobs engine for economic revitalization.
We encourage you to retain this report as a reference point. Consider how this information may impact
you – now and throughout the year. As always, please feel free to contact us. We welcome your questions
and feedback.
Thank you for your interest in this important analysis of the SMB economic and employment outlook
across major industries and around the nation in Q2 2013.

3. 2013 COMPANY POSITION
Despite only slight increases in job and economic prospects, SMB
leaders reported a marked improvement from the previous quarter
regarding the position in which they view their companies. With
opinions consistent moving toward growth, 3 percent reported
their companies to be in survival mode and 9 percent (down
from 19 percent in Q1) reported their companies in a controlled
retrenchment position. Those respondents reporting that their
companies are maintaining stability or in growth mode increased
from 75 percent in Q1 to 88 percent in Q2.
Select the statement that best describes your
company’s position for 2013.
JOB GROWTH PROSPECTS
Strong second quarter respondent optimism for job growth within
surveyed companies mellowed slightly in Q2 as optimism shifted
toward the center. While 41 percent responded being somewhat
optimistic in Q1, that number dropped to 34 percent in Q2, and
respondents who reported in the middle at being neither optimistic
nor pessimistic grew from 19 percent in Q1 to 38 percent in Q2.
Third quarter optimism regarding job growth prospects for the
United States as a whole, remained relatively unchanged from Q1,
with a slight uptick in respondents who are somewhat optimistic
and a moderate decrease in overall pessimism.
Indicate your feelings about the following:
> JOB GROWTH PROSPECTS FOR YOUR COMPANY IN 2013
> JOB GROWTH PROSPECTS FOR THE UNITED STATES IN 2013
45%
Growth
43%
Maintaining
stability
9%
Controlled
retrenchment
3%
Survival
2 | SMB Job Generation Outlook Q2 2013
ECONOMIC PROSPECTS FOR
COMPANIES & COUNTRY
While job growth optimism cooled slightly, overall economic optimism
has grown. More than one-third (77 percent) of respondents are
somewhat or very optimistic about the economic prospects of their
own companies and only eight percent reported being pessimistic.
The greatest change was in the jump of respondents who reported
being very optimistic about their economic prospects – bumping from
25 percent in Q1 to 34 percent in Q2.
These leaders are also increasingly bullish on the prospects of the
national economy. The number of respondents reporting being
somewhat or very optimistic about the nation’s economic prospects
grew steadily over the past three quarters, from 37 percent in Q4
2012 to 54 percent in Q1 and reaching 57 percent in Q2. Slightly
more than 20 percent remained in the middle regarding the nation’s
economic prospects.
Indicate your feelings about the following:
> ECONOMIC PROSPECTS FOR YOUR COMPANY IN 2013
> ECONOMIC PROSPECTS FOR THE UNITED STATES IN 2013
TITLES & COMPANY REVENUE
With a continued focus exclusively on the principles at each
company, the SMB Job Generation Outlook surveys only executives
who are president, CEO or owners of their companies. In Q2 2013
we surveyed 100 top executives from around the nation and across
industry segments.
Nearly half of our respondents reported annual revenue in 2012
at $50M-$150M, representing the US small business market.
Another 44 percent reported revenue greater than $151M, with
11% reporting between $601M-$1B.
Respondent title:
36%
President
45%
$50M - $150M
26%
$151M - $300M
18%
$301M - $600M
11%
$601M - $1B
2012 company revenues of responding executives:
35%
CEO
Very optimistic
Somewhat optimistic
Neither optimistic nor pessimistic
Somewhat pessimistic
Very pessimistic
29%
Business Owner
17%
34%
38%
8%
3%
Very optimistic
Somewhat optimistic
Neither optimistic nor pessimistic
Somewhat pessimistic
Very pessimistic
9%
41%
22%
16%
12%
Very optimistic
Somewhat optimistic
Neither optimistic nor pessimistic
Somewhat pessimistic
Very pessimistic
34%
43%
15%
8%
0%
Very optimistic
Somewhat optimistic
Neither optimistic nor pessimistic
Somewhat pessimistic
Very pessimistic
11%
46%
22%
14%
7%

4. JOB GENERATION
SMB leaders continue to agree with the oft-repeated adage that
small and mid-sized businesses are the job generators of the U.S.
economy. An overwhelming 84 percent agree with that statement,
while only 4 percent disagree. In terms of their companies,
agreement moved more to the middle in Q2, with 63 percent of
respondents agreeing that their own companies are job generators
(down from 77 percent in Q1) and more than double (15 percent in
Q1 to 33 percent in Q2) now take a neutral position on their own job
generation.
Indicate the extent to which you agree or disagree
with the following statements.
IMPACT OF PATIENT PROTECTION
AND AFFORDABLE CARE ACT
The vast majority of SMBs leaders around the nation understand
that their businesses must plan or prepare for the October 2013
implementation of the Patient Protection and Affordable Care
Act, however only 18 percent report having completed business
preparations and being ready. More than half (57 percent) report
having worked on preparation plans but remaining unready for
implementation. Eleven percent of respondents plan to begin
preparation and another 11 percent plan to do nothing to prepare
for the law’s implementation.
How much of an impact will the Patient Protection
and Affordable Care Act have on your business plans
> SMBs ARE THE JOB GENERATORS OF THE U.S. ECONOMY
> I SEE MY COMPANY AS A JOB GENERATOR
3 | SMB Job Generation Outlook Q2 2013
BIPARTISANSHIP
Optimism regarding bipartisanship at the national level did not
change in Q2. Change was noted, however, in the percentage of
respondents being somewhat or very pessimistic regarding federal
bipartisanship. While the combined percentage of those reporting
being somewhat or very pessimistic grew only two percentage
points over Q1, the proportion of very pessimistic responses
increased 11 points to 86 percent.
As with last quarter, SMB leaders are less pessimistic regarding
state-level bipartisanship (53 percent) than national cooperation
(64 percent), although that leveling off of pessimism did not
translate into an overall increased optimism. Only 16 percent of
respondents reported being somewhat or very optimistic about
either governmental levels working together and nearly one-third
reported being ambivalent about state bipartisanship.
Indicate your feelings about the following:
Very optimistic
Somewhat optimistic
Neither optimistic nor pessimistic
Somewhat pessimistic
Very pessimistic
7%
12%
31%
21%
32%
> BIPARTISANSHIP IN STATE GOVERNMENTS
MINIMUM WAGE
While SMBs leaders continue not to appear to be in support of
increasing the minimum wage, the strength of their opposition
weakened slightly in Q2. The largest response continue to be
that SMBs would increase prices to end customers in order (23
percent) and another 18 percent said a minimum wage increase
would reduce their new hiring plans.
Interestingly, the percentage of respondents who reported that
increasing the minimum wage would not impact their business
increased from only 1 percent in Q1 to 7 percent in Q2. Additionally,
more than half of the respondents reported not knowing how the
proposed increase would affect their businesses.
If the minimum wage was to increase to $9.00 per
hour, what impact would that have on your business?
Agree strongly
Agree
Neither agree nor disagree
Disagree
Disagree strongly
37%
47%
12%
4%
0%
Agree strongly
Agree
Neither agree nor disagree
Disagree
Disagree strongly
23%
40%
33%
3%
1%
> BIPARTISANSHIP IN FEDERAL GOVERNMENT
Very optimistic
Somewhat optimistic
Neither optimistic nor pessimistic
Somewhat pessimistic
Very pessimistic
4%
12%
20%
9%
55%
We will increase prices to our end customers
We will reduce our new hiring plans
We will reduce our current work force
We will eliminate all new hiring
We will not stay in business
Increasing the minimum wage
will not impact my business
Other
Don’t know
23%
18%
15%
6%
4%
7%
0%
54%
Considerable
positive
impact
Minor
positive
impact
No impact Minor
negative
impact
Considerable
negative
impact
4% 5%
25%
36%
30%
*Multiple
Responses were
Allowed

5. IMMIGRATION REFORM
SMB leader support for easing immigration requirements dropped
slightly in all four categories polled. Respondents shared greater
support for high-demand skilled workers than for the larger
population of immigrants. Less than half (46 percent) agree the U.S.
should ease immigration constraints for skilled workers in IT, science,
and other high-demand fields. Thirty-seven percent of respondents
support easing requirements for immigrants already living in the
United States. Slightly fewer (31 percent) however, support easing
immigration requirements for all immigrants. Higher rates of
respondents do not support the easing of requirements for either
population (34 percent and 42 percent, respectively).
How much do you agree or disagree with the
following proposals for immigration reform?
> THE U.S. SHOULD EASE REQUIREMENTS FOR SKILLED
WORKERS IN IT, SCIENCE AND OTHER HIGH-DEMAND FIELDS.
4 | SMB Job Generation Outlook Q2 2013
Agree strongly
Agree
Neither agree nor disagree
Disagree
Disagree strongly
17%
29%
30%
12%
12%
> THE U.S. SHOULD EASE REQUIREMENTS FOR SKILLED
LABORERS IN MANUFACTURING.
Agree strongly
Agree
Neither agree nor disagree
Disagree
Disagree strongly
11%
32%
34%
11%
12%
> THE U.S. SHOULD EASE REQUIREMENTS FOR ALL
IMMIGRANTS, NOW AND IN THE FUTURE.
Agree strongly
Agree
Neither agree nor disagree
Disagree
Disagree strongly
9%
22%
27%
14%
28%
> THE U.S. SHOULD EASE REQUIREMENTS ONLY FOR
IMMIGRANTS WHO ARE ALREADY LIVING IN THE U.S..
Agree strongly
Agree
Neither agree nor disagree
Disagree
Disagree strongly
8%
29%
29%
14%
20%
WORKFORCE RETIREMENT IN 2013
The percentage of SMBs expecting Baby Boomer retirements in
2013 shifted slightly in Q2. Last quarter only two-thirds (66 percent)
anticipated that less than 5 percent of their workforce would retire
this year. This quarter, that number has increased to nearly three-
fourths at 74 percent. Respondents expecting between 5 to 10
percent of their workforce to retire in 2013 also dropped from last
quarter, from 16 percent in Q1 to 9 percent in Q2. The only grouping
to show a slight increase in Q2 was a 2 percent increase in the 11 to
15 percent bracket, to 11 percent in Q2.
Select the percentage of your company’s workforce
that will retire in 2013.
Presidents, CEOs, and
Business Owners
5% - 10%
11% - 15%
Don’t know
16% - 20%
74%
5%
1%
11%
9%
IMPACT OF RETIRING BABY BOOMERS
SMBs are beginning to anticipate a greater level of impact that Baby
Boomer retirement will have on their company. The percentage of
respondents who believe that retiring Baby Boomers will have no
impact on their business has dropped 17 points, from 45 percent
in Q1 to 28 percent in Q2. Fifty-nine percent now believe Baby
Boomer retirement will have some impact (up from 51 percent in
Q1). Notably, the percentage of respondents who anticipate a very
big impact increased 7 points to 11 percent this quarter.
Describe the level of impact that Baby Boomer
retirement has on your company.
11% Very big impact
59% Some impact
28% No impact at all
2% Don’t know
< 5%

6. 5 | SMB Job Generation Outlook Q2 2013
DELAYED RETIREMENTS
Recent economic concerns have clearly impacted retirement plans
for many workers across the United States, including in SMB
companies. Two-thirds (76 percent) of the respondents believe that
up to 10 percent of their workforce delayed retirement over the past
three years because of the recession, and another 11 percent feel
that more than 1 percent did so. A similar percentage anticipate the
trend to continue, with 76 percent foreseeing up to 10 percent of
their workforce delaying retirement in the next three years.
The percentage of employees eligible for retirement
who delayed retirement, during the past three
years, due to economic constraints:
The percentage of employees you expect to delay
retirement, during the next three years, due to
economic constraints:
HOW RETIREMENT IMPACTS COMPANIES
Closely related to the level of impact is the manner in which Baby
Boomer retirement will impact SMBs. The response option with the
highest percentage was that Baby Boomer retirement creates a
knowledge gap that’s difficult to bridge, with 56 percent agreeing
with this statement (up from 48 percent in Q4 2012 and 37
percent in Q1). One response showing steady increase was that 23
percent of SMB leaders believe Baby Boomer retirement impairs
their ability to compete in the marketplace. This number grew 10
points from last quarter and 15 from Q4 2012.
Not all SMBs believe Baby Boomer retirement is solely a negative
impact, however. Forty-one percent believe retirements will improve
their ability to consider new approaches/processes and 34 percent
see retirements as an opportunity to enhance future innovation
and growth.
Describe how the retirement of Baby Boomers
impacts your company.
REHIRING RETIREES
In an effort to bridge that 56 percent perceived knowledge gap,
17 percent plan to hire Boomers back on a contract basis. The
majority, however (55 percent), have no plans to do so and another
25 percent are considering it, but have not yet decided on a course
of action.
Share whether your company is hiring retirees back
on a contract basis.
55%
No
25%
Considering it,
but haven’t
decided
17%
Yes
3%
Don’t
know
Presidents,CEOs,
BusinessOwners
Less than 2%
3% - 4%
5% - 7%
8% - 10%
More than 10%
Don’t know
29%
21%
15%
11%
11%
13%
Presidents,CEOs,
BusinessOwners Less than 2%
3% - 4%
5% - 7%
8% - 10%
More than 10%
Don’t know
30%
14%
16%
14%
11%
15%
CONTRACT OR PERMANENT
EMPLOYEES?
Q2 witnessed a slight decrease in SMB willingness to hire only
permanent employees, down 7 points from last quarter to 35
percent. Another 35 percent report hiring a combination of
permanent and contract employees, contrasted with the 12 percent
who will only hire contract workers in 2013. Eighteen percent report
no plans to hire either permanent or contract workers this year.
Describe the type of employees your company is
considering adding in 2013:
Creates a knowledge gap
that’s difficult to bridge
Improves our ability to consider
new approaches & processes
Enhances our prospects for
future innovation and growth
Impairs our ability to compete
Other
56%
41%
34%
23%
1%
*Multiple
Responses were
Allowed
35%
Permanent
employees only
18%
Neither
contract nor
permanent
employees
35%
Combination of
contract and
permanent
employees
12%
Contract
employees
only

7. 6 | SMB Job Generation Outlook Q2 2013
> ACCOUNTING
> INFORMATION
TECHNOLOGY
> MARKETING
> FINANCE
> LEGAL
> SALES
> HUMAN
RESOURCES
> MANUFACTURING
MANAGEMENT
PROFESSIONS IN WHICH
COMPANIES WILL HIRE IN 2013
SMB leaders were asked to segment their hiring plans based on
key corporate professions. In six of the eight professions surveyed,
the percentage of companies who plan to decrease workforce
has dropped. Reciprocally, six of the eight professions also saw a
decreased percentage of anticipated hiring, though at lesser rates.
Sales, Marketing, and IT continue to top the types of jobs most
in demand by SMBs, a trend in place for the past three quarters.
In Q2, those positions continue to be in demand with 46 percent
anticipating adding employees in Sales, 34 percent in Marketing,
and 24 percent in IT. Manufacturing Management demand has
remained consistent at 25 percent in Q4 2012 and Q1 and 22
percent in Q2. Notable changes in Q2 include:
• Active hiring plans for IT in Q2 have dropped from the past two
quarters.
• The percentage of SMBs planning to decrease HR employees
dropped 10 points in Q2, from a consistent 17 percent in Q4 2012
and Q1.
• Legal hiring plans have remained relatively flat in 2013, with nearly
80 percent planning no change in Legal staff numbers.
For each professional/management area, describe
your company’s planned 2013 workforce change.
HIRING VETERANS
While the flow of veterans back into the workforce continues to
accelerate and the topic has become a mainstream media and
political discussion, the majority of SMB respondents in Q2 (80
percent) report that their companies hire military veterans but that
they have no specific plans regarding their recruitment or hiring.
This number is up more than 20 points from Q1. In Q2, only 15
percent report having specific veteran hiring plans, down from 22
percent in Q1. The move to the middle was also noted at the other
end, where the percentage of SMBs who specifically said they will
not target military veterans for hiring in 2013 has dropped steadily
since early 2013, from 24 percent in Q4 2012 to 19 percent in Q1
and only 5 percent in Q2.
Share whether your company has specific plans to
recruit and/or hire military veterans in 2013.
17%
Increase
16%
Increase
11%
Increase
12%
Decrease
8%
Decrease
7%
Decrease
71%
Stay the same
76%
Stay the same
82%
Stay the same
24%
Increase
10%
Increase
22%
Increase
10%
Decrease
10%
Decrease
6%
Decrease
66%
Stay the same
80%
Stay the same
72%
Stay the same
34%
Increase
46%
Increase
8%
Decrease
4%
Decrease
58%
Stay the same
50%
Stay the same
No, we will not target
military veterans for
hiring in 2013
We hire military
veterans but don’t have
a specific plan
Yes, we have
specific plans to hire
military veterans
15%
80%
5%

8. 7 | SMB Job Generation Outlook Q2 2013
> NEXT QUARTER
Q2 2013
> NEXT 12 MONTHS
HIRING OR DOWNSIZING IN 2013
SSMBs reported hiring plans for the next quarter that were both
stable and fairly growth-oriented. The large majority of respondents
reported plans to either hire (40 percent) employees or make
no changes (46 percent) in Q2. Only 14 percent plan to reduce
workforce numbers this quarter. Looking ahead to the next twelve
months, respondents were slightly less certain in their hiring or
downsizing plans than they were for the single quarter, with 14
percent continuing plans to downsize, 41 percent reporting plans
to hire, 39 percent remaining stable and 6 percent uncertain about
the next twelve months (up from 0 in Q2 considerations).
Looking ahead, share your hiring or downsizing
plans for the following timeframes:
HIRING DIFFICULTY
The challenge of finding top talent in the marketplace continues to
be an issue for SMB leaders. The percentage of respondents who
reported that finding top talent was easy dropped from 13 percent in
Q1 to 8 percent in Q2, and only 1 percent of SMBs leaders reported
hiring top talent to be extremely easy. More than 60 percent
responded that finding top talent was difficult, with 7 percent
reporting it extremely difficult.
Rate the level of difficulty your company faces in
finding qualified candidates for professional and
management positions.
WORKFORCE, WAGES & SALARY,
AND BENEFITS DECREASES IN 2012
Of those expenses reported to have decreased in 2012 over 2011,
most companies reported those decreases to be in the lower level
bands, with the vast majority reported decreases of less than 10
percent. Decreases in benefits expenses were overwhelmingly
light, with 80 percent of respondents reporting less than 5
percent decreases in related costs. Workforce and wages &
salaries related expense decreases were less pronounced,
with decreases of 20 percent and 33 percent, respectively. As
opposed to expense increases, where no more than 3 percent
reported increases greater than 25 percent, SMBs leaders in
Q2 who accounted decreases in related expenses reported
more significant decreases at that greater than 25 percent level,
between 7 and 14 percent.
For those expenses that decreased in 2012,
select the percent they decreased over 2011.
80%
<5% 5% - 10% 11% - 15% 16% - 20% 20% - 25% >25%
0%0%0% 0%
Percentage of CEOs, Presidents, and Business Owners
> BENEFITS EXPENDITURES
<5% 5% - 10% 11% - 15% 16% - 20% 20% - 25% >25%
8%8%
0%
41%
33%
Percentage of CEOs, Presidents, and Business Owners
> WAGES & SALARIES
<5% 5% - 10% 11% - 15% 16% - 20% 21% - 25% >25%
7%
0%
20%
7%
13%
Percentage of CEOs, Presidents, and Business Owners
> WORKFORCE
40%
Hire additional employees
14%
Downsize workforce
46%
N/A or Don’t Know
41%
Hire additional employees
14%
Downsize workforce
45%
N/A or Don’t Know
53%
Neither difficult nor easy
Easy
Extremely easy 1%
31%
7%
Difficult
Extremely difficult
7%
54%
8%
20%

9. 8 | SMB Job Generation Outlook Q2 2013
CHANGE IN WORKFORCE AND
RELATED EXPENSES
The percentage of SMBs reporting expenses increases and
decreases for 2012 were similar to Q4 2012 and Q1 findings.
Workforce related expenses dropped 40 percent in Q2 the
findings, whereas both Benefits and Wages & Salaries saw a 5+
point increase in related 2012 expenses by Q2 respondents, at 61
percent and 59 percent respectively. Forty-five percent of SMB
leaders reported that workforce expenses stayed the same in
2012, and 15 percent continued to report a decrease in workforce
related costs.
Workforce Wages & Salary Benefits
Describe how your workforce and related
expenses changed in 2012.
40%
Increase
59%
Increase
61%
Increase
15%
Decrease
12%
Decrease
5%
Decrease
45%
Stay the same
29%
Stay the same
34%
Stay the same
WORKFORCE, WAGES & SALARY,
AND BENEFITS INCREASES IN 2012
Of the companies reporting an increase in workforce related
expenses in 2012, approximately 39 percent reported increases
that exceeded 11 percent. Fewer companies saw increases in
benefits (29 percent) or wages & salaries (23 percent) that
exceeded 11 percent. Benefits expenses saw the largest increases
between 5-10 percent with 47 percent of responding SMB leaders
reporting in that band. Both workforce and wages & salaries saw
the greatest expense increases in the less than 5 percent band
(with 40 percent and 47 percent, respectively).
For those expenses that increased in 2012,
select the percent they increased over 2011.
<5% 5% - 10% 11% - 15% 16% - 20% 20% - 25% >25%
10%
23%
40%
23%
Percentage of CEOs, Presidents, and Business Owners
3%3%
> WORKFORCE
<5% 5% - 10% 11% - 15% 16% - 20% 21% - 25% >25%
3%
28%
47%
22%
0%
Percentage of CEOs, Presidents, and Business Owners
0%
<5% 5% - 10% 11% - 15% 16% - 20% 20% - 25% >25%
> BENEFIT EXPENDITURES
> WAGES & SALARIES
2%
5%5%
43%
28%
17%
Percentage of CEOs, Presidents, and Business Owners

10. Lucas Group SMB Job Generation Outlook Survey
Q2, 2013
The SMB Job Generation Outlook survey evaluates key economic,
employment, and political drivers for the small to mid-sized business
market. Through detailed analysis, the Outlook provides timely insight
into both recent and near-term planned employment activity. This
Q2 survey captures visions and priorities of noteworthy SMB senior
leaderships, including Presidents (36 percent), CEOs (35 percent)
and Business Owners (29 percent).
Q4 2012 & Q1 Summary
The inaugural survey conducted in December 2012 revealed a
dichotomy between how SMB leaders viewed their own businesses
and how they viewed the national economy. In Q4 2012, respondents
were confident in the 2013 prospects for their own companies, with 57
percent believing that they would grow and 55 percent planning to hire
new employees. They were far less optimistic about Washington with
almost half pessimistic about the prospects for the national economy.
Several months later, this SMB optimism continued with 71 percent
optimistic about their companies’ prospects in 2013 and 59 percent
optimistic about their companies’ job growth prospects. One notable
change between Q4 2012 and Q1 was reported in SMB leaders’
opinions regarding the national economy and national job growth
prospects. In Q1, 47 percent reported being optimistic about job growth
prospects, compared to only 28 percent in Q4 2012. Key political and
economic issues, such as The Affordable Care Act, potential increases
to the minimum wage, and immigration reform evoked varied—and in
some cases—uncertain opinions from the SMB market.
Q2 – A Shift toward the Middle
Strong first and second quarter optimism for job growth prospects
of the surveyed SMB leaders’ own companies mellowed slightly in
Q2. Respondents reported a move to the middle with 38 percent
feeling neither optimistic nor pessimistic, up nearly twenty points
Continued next page...
COMPANY SIZE
Small businesses are the majority of the survey sample with 56
percent employing fewer than 500 employees and only 7 percent
employing more than 5,000.
Select the number of workers your company
currently employs.
TYPE OF COMPANY
Describe your company’s ownership structure.
68%
Private
17%
Family-
owned
13%
Public
2%
Private equity
portfolio
company
9 | SMB Job Generation Outlook Q2 2013
LENGTH OF TIME IN BUSINESS
The survey group continues to be composed of long-standing
businesses with more than half of the Q1 respondents in business for
more than 20 years. Another 38 percent have been in business from
6-20 years.
How long has your company been in business?
INDUSTRY
Select your company’s industry.
17% Finance, Insurance, Real Estate
7%
Healthcare/
Medical
9%
Business
Services
2%
Transportation
Services
4% Consumer Services
2%
Nonprofit &
Membership
Organizations
9%
Other
3% Automotive
21% Manufacturing
7% Construction
4%
Legal
Services5% Information Technology
3%
Energy,
Oil,Gas &
Utilities
2%
Agriculture
and Mining
3%
Telecommunications
2%
Arts,
Entertainment
& Recreation
More than 20 years
11 – 20 years
6 – 10 years
3 – 5 years
0 – 2 years
47%
21%
22%
10%
0%
23%
32%
17%
13%
6%
6%
3%
1 – 99
100 – 499
500 – 999
1,000 – 1,499
1,500 – 4,999
5,000 – 9,999
10,000 or more

11. 10 | SMB Job Generation Outlook Q2 2013
For more information regarding the
SMB Job Generation Outlook, please visit
www.lucasgroup.com/smb-job-generation
from 19 percent in Q1. However, while job
growth prospect optimism slowed; economic
prospects for surveyed SMBs continued to
increase quarter over quarter, rising from 37
percent of respondents in Q4 2012 reporting
being somewhat or very optimistic about their
own companies’ economic prospects to 54
percent in Q1 and 57 percent in Q2.
With an overall increase in economic
optimism, Q2 saw a positive move in how SMB
leaders viewed their company positions. In Q1
three quarters of respondents reported their
companies in either a stable, maintenance
mode or a growth position. In Q2 that number
rose to 88 percent of surveyed companies
maintaining stability or growing. In terms
of job generation, the majority of survey
respondents continue to agree with the
statement that SMBs are the job generators
for the U.S economy, with more than 80
percent agreeing or strongly agreeing steadily
over the past three quarters.
Slowdown in both Growth
and Reduction
Slightly fewer SMB leaders report planning
to hire in the next 12 months, with respondent
percentages dropping from 61 percent
planning to hire to 41 percent. This decline,
however, does not indicate an increase in
subsequent downsizing. The percentage of
SMBs leaders planning to downsize their
workforce in the next 12 months also dropped
from 20 percent in Q1 to 14 percent in Q2.
Nearly 40 percent of respondents report
planning no significant change in the size of
their workforce over the next 12 months.
Sales, Marketing, IT and Manufacturing
Management continue to be the most in-
demand professional segments, with Sales
leading the hiring charge at nearly half of the
respondents looking to increase their Sales
force in 2013. The majority of SMB companies
surveyed plan to keep force sizes the same
for Legal, Accounting, Finance and HR during
2013. Both hiring and downsizing appeared
to slow slightly in Q2 for most professional
segments, indicating that many SMB leaders
anticipate that the days of cutting are over,
even if growth remains moderate.
Baby Boomer Retirement
Creating Increased Impact
As national employment models indicate
that Baby Boomers will retire at the rate
of approximately 10,000 workers a day for
more than a decade to come, measuring and
evaluating the impact this retirement flood will
have on business is a significant conversation
in the marketplace. Based on a comparison
of our survey responses in Q1 and Q2, SMBs
are beginning to anticipate impact to their
businesses. The percentage of SMB leaders
who foresee no impact to their companies
dropped from 45 percent in Q1 to 28 percent
in Q2. Likewise, 11 percent anticipate a very
big impact – up from only 3 percent in Q1.
The types of impact, however, are not
necessarily negative. While more than half
of survey respondents anticipate that Baby
Boomer retirement will create a knowledge
gap that’s difficult to bridge, 41 percent
say retirements may improve their ability to
consider new approaches and processes and
another 34 percent agree with the statement
that Baby Boomer retirements enhance
their prospects for innovation and growth. In
response to bridging the surmised knowledge
gap, at this point less than 20 percent of SMB
leaders anticipate hiring back retirees on a
contract basis.
Lucas Group will continue to survey SMB
leaders across the country about these
significant economic and employment issues
each quarter and will monitor how SMB
opinions and business plans may alter as
Washington politics persist, Congressional
actions occur, and Wall Street responds.
Lucas Group SMB Job Generation Outlook Survey