With Rising Revenues and Economic Confidence High, Small Businesses Look to Hire Amid Tightening Job Market
Local entrepreneurs are finishing 2018 on a high note, with most D.C. small business owners anticipating year-over-year revenue growth while making plans to hire and expand in the year ahead, according to the fall 2018 Bank of America Business Advantage Small Business Owner Report. While the majority of business owners are pleased with the direction of the economy, D.C. entrepreneurs are struggling to land qualified employees in a highly competitive local job market.
The report, based on a semiannual survey of 1,000 small business owners across the country and the greater Washington, D.C. area, revealed 87 percent of D.C. entrepreneurs are confident their year-end revenue will exceed that of 2017. In addition, over the next 12 months:
“Excited about their business prospects, D.C. entrepreneurs are looking to expand and take advantage of a strong economy,” said Michael Bonura, Greater Washington, D.C. small business banker manager at Bank of America. “We’re seeing multi-year highs in expansion and loan application plans — which is consistent with the housing boom taking place in the District — but a highly competitive market for talent is impacting these expansion plans.”
Heightened competition for D.C. talent as small business hiring ramps up
As D.C. business owners make plans to hire in the year ahead, they acknowledge that identifying and retaining employees has become a significant challenge. In the last year, turnover affected 34 percent of D.C. entrepreneurs. Among D.C. business owners who sought to hire new employees, 57 percent say they had difficulty finding qualified candidates, in large part due to the tightening job market.
To adjust to these challenges, business owners have modified their hiring strategies to find and recruit top talent by:
When it comes to the top characteristics business owners are looking for in their potential job candidates, D.C. entrepreneurs primarily value integrity (49 percent), previous work experience (47 percent) and ability to learn new skills (42 percent).
Concern for most economic issues fades; worry over government regulation and interest rates grows
The survey found a general trend of declining, or steady, concern over most economic factors that are tracked with two notable exceptions. Fifty-two percent of D.C. entrepreneurs are concerned about interest rates, up from 43 percent last fall. Similarly, business owners are increasingly concerned over compliance with government regulations (41 percent), up from 33 percent last fall. Health care costs are once again the top concern for D.C. entrepreneurs at 61 percent (down slightly from 63 percent last fall).
Perhaps a result of recent changes and uncertainty about U.S. trade policies, 39 percent of D.C. business owners identify U.S. trade policy as an economic concern. Thirty-eight percent say the latest tariffs/U.S. trade policies have impacted their businesses, with 17 percent reporting a positive impact, 11 percent reporting both positive and negative effects, and 10 percent reporting a negative impact.
D.C. business owners feel the holiday spirit; recommend entrepreneurship as a career path
D.C. business owners are feeling the holiday spirit as 85 percent plan to offer at least one holiday perk to their employees. The top holiday perks being offered are closing the office during the holidays (49 percent), giving salary bonuses (45 percent) and giving gifts (40 percent). Finally, despite unique challenges in managing a small business, D.C. entrepreneurs love what they do. Eighty-five percent say the added stress of entrepreneurship has been worth it, and 88 percent would recommend that others follow in their footsteps.
For a complete, in-depth look at the insights of the nation’s small business owners, read the fall 2018 Bank of America Business Advantage Small Business Owner Report.
GfK Social and Strategic Research conducted the Bank of America Small Business Owner Report Survey for fall 2018 online between August 30 and September 13, 2018, using a pre-recruited online sample of small business owners. GfK contacted a national sample of 1,067 small business owners in the United States with annual revenue between $100,000 and $4,999,999 and employing between two and 99 employees. In addition, a total of approximately 300 small business owners were also surveyed in each of 10 target markets: Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, San Francisco, and Washington, D.C. The final results were weighted to national benchmark standards for size, revenue and region.
Prior to 2016, previous waves of the Small Business Owner Report Survey were conducted by telephone and while best efforts were made to replicate processes, differences in sample, weighting and method suggests caution when making direct statistical comparisons of the results from pre-2016 and post-2016.
Bank of America is one of the world’s leading 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. The company provides unmatched convenience in the United States, serving approximately 67 million consumer and small business clients with approximately 4,400 retail financial centers, approximately 16,100 ATMs, and award-winning digital banking with more than 36 million active users, including nearly 26 million mobile users. Bank of America is a global leader in wealth management, 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 across the United States, its territories and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
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Reporters may contact:
Larry Grayson, Bank of America