By Tom Sarach, Jr.

“When will businesses start hiring again?” is a question on the forefront of nearly everyone’s mind these days as, let’s face it, everyone’s life is deeply affected by the uncertainty surrounding the economy. From my vantage point, as the long-time president of a staffing firm and as the founder of a software company, the real question is, “When will businesses feel SAFE enough to hire again?” Through formal and informal discussions — in my congressman and senators’ offices as well as in my clients’ conference rooms and offices — the collective answer couldn’t be more clear: “When the financial impact of the health care reform bill is known.”

On Sept. 23, 2010, the first component of health care reform, the Patient Protection and Affordable Care Act, also known as ACA, went into effect. In theory, the reforms are intended to help small businesses – defined by the Small Business Association as an independent business having fewer than 500 employees. Considered the “engine that moves America,” small businesses represent a whopping 99.7 percent of all firms, employ over half of the private sector, pay 44 percent of the total U.S. private payroll and have generated 64 percent of net new jobs over the past 15 years.

There’s no denying that small businesses are the backbone of our local and national economies. And there’s no denying that high health care costs have hindered small business owners and their employees for more than a decade as average annual family premiums for workers at small firms increased by 123 percent from 1999 to 2009. While the ACA includes several short- and long-term provisions designed to help small businesses pay for and maintain health insurance for their workers, the way these provisions play out will take place over the next four years. Employers just don’t know how they will play out, and that uncertainty has caused them to become cautious in a number of ways, particularly when it comes to hiring.

As employers wait out the effects of the new provisions, 99ers –those who have tapped out their unemployment benefits — are desperate for work, and many are taking jobs with lower wages. That reality has lowered workers’ expectations when it comes to wages, and employers have quickly become aware of that expectation. Without knowing the financial impact of the new health care reforms on their books, employers that are hiring are saving money by paying workers less and building a cushion to absorb and offset future health care reform costs.

Do I think the majority of employers will ease off the brake and hire again? Most definitely. In 28 years of business, Reliance Staffing, one of the largest and oldest personnel firms in southeast Virginia, has weathered three recessions. But this one has been a real whopper. The cycles of hiring and job freezes I’ve seen over the years haven’t endured an economic downturn quite like the one our country is currently experiencing.

I predict that between now and 2014, as we witness the good intentions and theories behind health reform play out, temporary staffing agencies will see their roles increase as negotiators of mutually beneficial relationships between employers and employees. This scenario isn’t theoretical. It is already at play. Employers can move into the passenger seat and let companies like mine drive — avoiding the complexity and risk of health care reforms — at least until we all know where we’re headed.

Tom Sarach is the president of Reliance Staffing Services, a locally owned and operated personnel firm based in Virginia Beach. He is also the founder of COATS — Complete Office and Automation for Temporary Staffing — a software company whose products are marketed and sold nationwide.

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