The fiscal cliff deal and what it means for hiring

Crisis averted. Even though the fiscal cliff consequences of higher tax rates and massive spending cuts were supposed to take effect if the new year began with no deal, the scenario was avoided with no compromise when the clock struck midnight on December 31. It took the U.S. House of Representatives until late in the evening on January 1 to approve a Senate-backed measure, but the deal went through with bipartisan support in both chambers of Congress and the country avoided starting 2013 off on a bad foot.

The sweeping legislation will also have a considerable effect on U.S. business conditions, though it remains to be seen how employers will react. However, early indications point to a much relieved business industry that will look to focus on increasing hiring with the help of recruiting agencies.

Taxes the central theme
As expected, personal income taxes did go up for the wealthy. Those making more than $400,000 on a single return or $450,000 on a joint filing will have to pay a rate of 39.6 percent. However, while many economic analysts predicted a wide slate of tax increases for businesses, that particular prediction did not come to fruition.

In fact, part of the deal crafted by Vice President Joe Biden and Senate Minority Leader Mitch McConnell (R-KY) calls for around $46 billion in business tax breaks, including an extension of a wind production tax credit and the research and development tax credit. A provision in the package also allows for businesses to write off half the value of new investments.

However, while many see the condensed fiscal cliff deal as a stopgap measure that does not tackle issues like the debt ceiling, which will be the main political battle just months from now, it was still a sufficient enough compromise to preserve what optimism businesses had.

"[A]though politicians have handled the most imminent threat to growth, political uncertainty will persist over the coming months," said Signe Roed-Frederkisen, U.S. economic analyst for Danske Bank. "In terms of growth impact, the deal is line with our expectation."

Employers would have continued hiring with no deal
Even though the giant cloud of uncertainty cast by the fiscal cliff led many to ponder scaled-back operations, a majority of respondents to a recent survey said they would have continued hiring even with the absence of a fiscal cliff deal.

In a survey by Baker Tilly, 75 percent of CFOs, controllers and top tax professionals said their companies would not bank their hiring intentions on possible fiscal cliff legislation.

Overall, reducing unemployment has been identified as a top priority for the government and U.S. businesses and not even a fiscal cliff failure would have dissuaded a large majority of companies from hiring. Optimism is the sentiment of the day, and businesses working with staffing agencies can hire new talent for the new year.