With all the talk about the recent Tax Cuts and Jobs Act, it’s important to look at how it will impact your hiring process. Some larger corporations receiving bigger tax breaks will put the money toward hiring more staff or increasing benefits. While smaller companies won’t be seeing the same gross impact, they can make smaller changes to improve both recruiting and hiring.
No matter the size of your company, it’s important to weigh your options. In order to help you determine how the tax reform could positively impact your hiring process, we went to the experts.
Here’s what leaders are doing and how you can use the new reform to the benefit of your hiring strategy:
Benefits directly tie in with the hiring process. Great benefits attract top talent and increase retention. Companies can invest in improving and expanding benefits if they have extra money from the tax cuts.
Make the little things count
Like most businesses in the U.S., we are a small business and not a publicly traded company. The reduction of the corporate tax rate doesn’t affect us. Perhaps the biggest added value for us is that we can now expense more things that used to be on a depreciation schedule. We’ve been in a great office for about two years but have put off ordering furniture until now. The new law will help us a lot in this regard.
While the new tax code won’t really affect our hiring process, when we hire, we always make sure to identify a clear return on the investment. Too often, as we have gotten bigger, we have forgotten to trace the ROI. But we are learning now, more than ever, that we have to be able to show how every new team member will help us to better work and grow bigger.
Plan strategic investments
The tax reform will free up cash flow for many companies, which gives them the opportunity to increase talent acquisition. In a recent Yale University poll, over 40 percent of American companies said they plan to ramp up hiring over the next few months. An additional 14 percent said they would use their tax savings to make large capital investments, such as new equipment or factories, that will also bring jobs.
At the end of the day, U.S. corporations will use their tax breaks in the manner that creates the most value for their shareholders. For many companies, this means pay raises and hiring incentives. Capital expenditures to boost productivity and hiring skilled workers are wise investments for companies looking to expand their operations. However, many corporations plan to use the tax break to repurchase stock and boost shareholder value.