Small Businesses to Increase Spending on HR and Marketing

Last month, we looked at encouraging news about anticipated small business growth for the balance of 2010, and now, additional research from FedEx Office projects small businesses to be ramping up on their traditional and online marketing investment over the same time period.

In its third annual Signs of the Times survey of small businesses, FedEx Office finds nearly three-quarters of small businesses identifying themselves as the driving force behind the economic recovery over the course of the rest of the year. This we know: The data echo those in Administaff’s survey reported on last month and, indeed, 18 percent of small businesses are considering an increased budget for staffing and HR activities in 2010, according to FedEx Office, up from just 9 percent last year.. What FedEx also finds, however, is that more than two-fifths expect to increase their spending on marketing and advertising before the year is out; close to one-third expect to do likewise on sales initiatives.

When the economy turns south, marketing is often (shortsightedly) the first budgetary outlay to go. That would suggest that these results are clear end-of-recession indicators. But that would be too simple. Evidently, even during the height of the recession (last year), similar percentages of small businesses considered making increases to their marketing and advertising budgets. Perhaps more tellingly, 31 percent of the 34 percent of small businesses that cut their marketing and advertising budgets in 2009 report that these had a negative or extremely negative effect on their operations.

The parallels are interesting. For instance, in an effort to cut costs, businesses that elect to cut staff arbitrarily during a recession often encounter even costly problems because of their actions. A useful study would be one that surveys such businesses to learn how these costs ultimately affected their operations.

Posted by RecruitingTrends.com on June 2, 2010. Filed under Data Watch. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry