Facts & Resources

Small Business Owners Say Finding and Retaining Talent Is Challenging, but Critical for Success

Fall Small Business Owner Report Also Finds Optimism for Growth in 2014, Tempered by Uncertainty about Health Care

Thursday, November 14, 2013 9:00 am EST



Public Company Information:

"One of the biggest challenges small business owners throughout the country face is hiring and retaining talent, yet they say managing their staff is one of their greatest sources of pride"

Bank of America today released its fall 2013 Small Business Owner Report, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners across the country. The survey found that nearly one-third (31 percent) of respondents plan to hire over the next 12 months. Yet close to half (47 percent) say finding qualified employees is difficult, and 92 percent take steps to retain the valuable workers they already employ.

“One of the biggest challenges small business owners throughout the country face is hiring and retaining talent, yet they say managing their staff is one of their greatest sources of pride,” said Robb Hilson, Small Business executive at Bank of America. “Whether they need to make operational improvements or grow their employee base, Bank of America is committed to helping our small business customers realize their vision for a successful 2014.”

For more information on small business owners’ 2014 outlook, click here.

Hiring the right talent is essential for growth
Hiring new talent is a direct indicator of economic health. According to the report, nearly three in five (56 percent) of those planning to hire are doing so to support an anticipated increase in business. Other reasons small business owners plan to hire include:

  • Bringing new or different skills to their business – 36 percent.
  • Providing relief to overworked employees – 26 percent.
  • Responding or adapting to a new business environment (e.g., mobile or digital) – 24 percent.

With good talent difficult to find, small business owners are being proactive about keeping top performers. Leading retention strategies of those surveyed include:

  • Offering competitive salaries – 54 percent.
  • Providing flexible working arrangements (e.g., flexible hours, work-from-home options) – 47 percent.
  • Paying bonuses for high performers – 45 percent.
  • Listening to and implementing employee feedback (e.g., employee surveys) – 38 percent.

For more information on small business owners’ talent needs, click here.

Top concerns of small business owners
Concerns over health care costs have grown significantly since the release of the fall 2012 Bank of America Small Business Owner Report. Nearly eight in 10 (77 percent) small business owners say that health care costs are a significant concern, which compares to 65 percent in the fall 2012 report.

However, when asked about health care legislation affecting hiring plans in the next year, small business owners say:

  • My hiring plans will not change – 56 percent.
  • I will only hire part-time employees, independent contractors, or freelancers – 26 percent.
  • I no longer intend to hire new employees – 9 percent.

Additionally, more than three of every four small business owners surveyed (76 percent) say the effectiveness of government leaders is a significant concern, which compares to 68 percent in the fall 2012 report.

Other top concerns small business owners have for the success of their small business in the next 12 months:

  • Commodities prices – 70 percent.
  • Strength of the U.S. dollar – 69 percent.
  • Consumer spending – 63 percent.

Small business owners spreading holiday spirit
Close to eight out of 10 small business owners (79 percent) see Black Friday as having little or no impact on their business’ bottom line. And nearly eight out of 10 (81 percent) think Cyber Monday is similarly overhyped. However, the percentage that does see an impact has increased from last year. In fact, 29 percent of small business owners in the consumer products, retail or wholesale industries feel Black Friday has a significant impact on their bottom line, up from 9 percent in the fall 2012 report. In addition, nearly 16 percent of small business owners in those industries say Cyber Monday has a significant impact on their bottom line, which is 11 percent higher than a year ago.

Maintaining a work-life balance during the last month of the year does not appear to be an issue for many small business owners. While about one-third (34 percent) report working longer hours during the holidays, a greater number of respondents (44 percent) say they are not experiencing any stress in anticipation of the upcoming holiday season and more than one in four (27 percent) report they are able to take extra time off to spend with family during the holidays.

Small business owners are generous when it comes to thanking their employees during the holidays. Only a small percentage (14 percent) say they do not intend to offer holiday-related perks, but the majority say they plan to show their appreciation this holiday season by:

  • Rewarding salary bonuses – 49 percent.
  • Hosting a holiday party – 43 percent.
  • Giving gifts – 41 percent.
  • Offer flexible working hours or vacation time during the holidays – 38 percent.
  • Closing the office during holidays – 35 percent.

For more information on small business owners’ holiday outlook, click here.

Local insights across the country
The report also analyzed specific needs of small business owners in nine local markets across the country. Key insights gathered include:

  • Miami small business owners are most bullish on growth, with 64 percent expecting revenue to increase in the next 12 months.
  • Atlanta and D.C. small business owners are least optimistic about the national economy, with less than a quarter (23 percent) of respondents in each of those cities expressing confidence that the national economy will improve over the next 12 months. Yet 41 percent of D.C. small business owners believe their local economy will improve during that same time period.
  • When asked about their local economies, San Francisco small business owners expressed greatest optimism, with more than half (54 percent) believing their local economy will grow over the next 12 months.

Bank of America has continued to lend actively to small businesses across the U.S. Through September of this year, Bank of America extended more than $7.9 billion in new credit to small businesses – an increase of 28 percent over the same period last year. The bank’s combined new and renewal small business lending totaled nearly $18 billion. This has helped enable Bank of America to exceed its national small business lending pledge to the White House and the U.S. Small Business Administration.

For a complete, in-depth look at the insights of the nation’s small business owners, read the entire fall 2013 Bank of America Small Business Owner Report and for additional insights, download the Small Business Owner Report national infographic here.

About the Bank of America Small Business Owner Report
Braun Research conducted the Bank of America Small Business Owner Report survey by phone between September 12 and October 3, 2013, on behalf of Bank of America. Braun contacted a nationally representative sample of 1,000 small business owners in the United States with annual revenue between $100,000 and $4,999,999 and employing between 2 and 99 employees. In addition, 300 small business owners were also surveyed in nine target markets: Los Angeles, Dallas, Washington, D.C., New York, Boston, Chicago, San Francisco, Atlanta and Miami. The margin of error for the national sample is +/- 3.1 percent and the margin of error for the oversampled markets is +/- 5.7 percent, with both reported at a 95 percent confidence level.

Bank of America
Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. We serve approximately 51 million consumer and small business relationships with approximately 5,200 retail banking offices and approximately 16,200 ATMs and award-winning online banking with 30 million active users and more than 14 million mobile users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

Visit the Bank of America newsroom for more Bank of America news.

The Braun Research survey results conducted on behalf of Bank of America and interpretations in this release are not intended, nor implied, to be a substitute for the professional advice received from a qualified accountant, attorney or financial advisor. Always seek the advice of an accountant, attorney or financial advisor with any questions you may have regarding the decisions you undertake as a result of reviewing the information contained herein. Nothing in this report should be construed as either advice or legal opinion.

© 2013 Bank of America Corporation. All rights reserved.

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Small Business Owner Report map (Graphic: Business Wire)
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Reporters May Contact:
Don Vecchiarello, Bank of America, 1.980.387.4899