The Affordable Care Act makes it less likely that businesses will be hiring in the next year, roughly two-thirds of accountants surveyed recently said.
Sageworks, a financial information company, surveyed 300 accounting professionals who work closely with private companies and found that 66 percent believe the new health care changes will make it less likely that businesses will add new workers in the next 12 months. Sixteen percent said it would have "no impact" on hiring and 14 percent of respondents said they were "unsure" about the ultimate impact. Only 2 percent said the Act, often referred to as Obamacare, makes it "more likely" that businesses will add new employees.
Sageworks Chairman Brian Hamilton said private companies are performing well, as evidenced by the most recent Private Company Report showing average annual sales growth of about 10 percent and expanding net profit margins as of May 31. But they're not hiring with the same volume and consistency expected at this point in the economic recovery, Hamilton said.
"The recent delay in the implementation of the Affordable Care Act, and the uncertainty that accompanies such a delay, won't help the employment situation," Hamilton said. "Private businesses are trying to map out their hiring and investment plans for the next twelve months, and a last-minute delay like this will increase the likelihood that companies remain on the fence about hiring."
Separately, Sageworks asked CPAs more generally about the hiring picture for their business clients, and the outlook seems less optimistic than it was in March.
More than 60 percent of respondents in the latest survey said that businesses are planning to maintain their current number of employees over the next 12 months. Thirteen percent said that, based on conversations with their business clients, they expect companies will increase their number of employees in the next year. Twelve percent predict companies will reduce their number of employees, and 12 percent said they are unsure about their business clients' hiring plans.
In March, a higher percentage of accountants polled by Sageworks expected business clients to increase hiring and a smaller share believed clients would reduce their number of employees.
Hamilton said the latest caution by business owners isn't surprising considering owners of the 27 million U.S. private companies are looking at their bottom lines in a very personal way. While big companies may consider using profits to pay dividends, for example, many private-company owners depend on their bottom lines to eat and handle other bills.
"They're going out a year and they've got credit cards, they've got kids in school, car loans, mortgages," Hamilton said in a recent television interview. "So when you affect their bottom line or they don't know what's going to happen, they're going to get cautious, and they're going to get cautious on their single biggest expense, which is people. By the way, they're also not borrowing a lot of money right now, so they are overhead reluctant."
This post originally appeared on Forbes.