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Even during the best of times, small businesses in America represent the majority of all new U.S. job growth.  In fact according to the Small Business Administration, most net job loss occurs within firms that are greater than 500 employees.

In a recent Fox News Sunday interview, Steve Odland, Chairman and CEO Office Depot, told host Chris Wallace that, “All net job creation happens in small business.”  This is at least in part because many of the largest U.S. corporations have matured.  Prior to last year’s recession, job growth at many major corporations had slowed or evaporated in corporate America.

Over the past year, the slow churn of persons leaving larger companies to become entrepreneurs, or to go to work for smaller organizations, has grown from a steady stream to an avalanche.

The reality is, the ranks of the temporarily unemployed are growing.  These days, temporary unemployment all too often is turning into long-term unemployment or underemployment.

Is our glass half full or half empty?   The reality, I guess, is both.

Just when you begin to bemoan the present employment situation, your thoughts are illuminated by the present spark of American innovation and entrepreneurship.

A recent article in Wired magazine titled, “Go Ahead….Fire Me,” stated that after experiencing layoffs, most able bodied American workers will always be able to take their skills elsewhere.  It is a recession’s way of leveling the playing field.

With stock dividends, the companies with less new growth opportunities and fewer new ideas must purge capital in the form of (theoretically) ever growing dividends.  The companies with greater sources of new business ideas and planned new business growth are capital hungry, and retain their dividends to invest in the new ideas.

With people, it’s the same.   Companies who cannot, or should not afford to retain the best and the brightest, naturally lose them to better, more fulfilling opportunities elsewhere.

See the quote below.  And, while it is dated, I still believe it today.  Yes, a lot has changed it was written.  At that time, unemployment was likely hovering below five percent.  It’s twice that today.

Yet, the best people will still be seen inside the best companies, even if the companies have only a few employees.  It’s the American way.  It’s the American dream.  And, at this point, it’s the American reality.

Thoughts for the Day

“Five years from now, you will look around and realize that the best employees can be found working for the companies who were paying the most attention.”

Dave E. Anderson

Alpha Scouts^™ LLC

July 15, 2005