In its recent report on the landscape of midsized businesses, the ADP Research Institute® struck upon a curious finding: these business owners feel what ADP calls a “gap in confidence” between the health of their own industries and the health of the US economy. Whereas 51 percent of business owners expect their industry to improve over the next year, only 15 percent feel the same about the US economy.
At first blush, this dissonance makes little sense. These industries don’t exist in a vacuum; their health is tied to the health of the whole economy. Based on the data found in ADP’s study, it appears that business owners feel a stronger sense of control over at-home factors like hiring the right employees who will help grow the company. Right now midsized companies who’ve graduated from startup status have more agency over how they grow human capital and company culture. Midsized business owners do not, however, feel as if they have control over more macro issues like changes in health care benefits, the Affordable Care Act, and government regulations.
This isn’t unfounded anxiety: the Taxpayer Advocate Service, the IRS department that operates a little like customer support for taxpayers, released a report last year titled “The Complexity of the Tax Code” (PDF). As if the title weren’t enough of a giveaway, the paper includes data from the Unpublished Commerce Clearing House showing that 4,680 changes were made to the tax code between 2001 and 2012—on average more than one a day. Confusion about these changes led to business owners spending over 6 billion hours a year on compliance and $168 billion (in 2010) on compliance costs.
In that light, the confidence gap suddenly becomes dazzlingly clear: midsized business owners are likely to be founders of once-small startups, who fiercely believe in their company’s mission (that’s possibly why they succeeded) but aren’t yet equipped to deal with technicalities foisted upon mature businesses.
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This article was written on behalf of ADP by the Quartz marketing team and not by the Quartz editorial staff.