It’s because business has gotten lean and mean, now a lot of folks a performing multidisciplinary work just to stay employed.
That’s really a huge part of it. Companies are learning how to work minus hiring employees if they can. It’s not just outsourcing, but also a lot of business owners can easily get the skills they need. Fro example, I’m going to be embarking on certification in website programming. Once I have that, I’ll be able to run my own news website, my own online auction house and bypass a ton of bureaucracy. I won’t have to split profits with a website programmer, an accountant, and someone to find stuff for me. Then, once I have things up and running, I’ll be making a huge profit without having to pay someone else, plus salary and health benefits. There’s no need ot take anyone on if I’m going to be able ot do it all myself.
For contracts, I have a legal service that does things for a drastically reduced retainer fee monthly and I don’t see why businesses should shell out big bucks just to retain a full staff that will end up expecting constant raises, bonuses, and other perks that will just drain the business. So many women want lavish maternity benefits and a guarantee that their job will be there for them, no matter how long they take off. Businesses can’t win in this country unless they start doing multiple things or outsource to someone who actually APPRECIATES the job and appreciates the opportunity instead of whining about not making enough to pay for multiple vacations and more and more and more perks and benefits.
Could it be that business is keeping more cash because 1) credit is still tight for many businesses and they need cash on hand 2)To fight off coming margin collapse due to rising raw material costs....
And, to some extent, implementing both anticipatory and costs-experienced price hikes, or down-sizing packaging and quantity leaving the same traditional prices. However, this won’t work for long. Shoppers are figuring it out gradually.