New York City Entrepreneurs Vie for Talent as Revenue Growth Fuels Expansion
With Revenue Expectations and Expansion Plans on the Rise, More Small Businesses Look to Hire Amid Tightening Job Market
New York City small business owners are optimistic heading into 2019, with most area entrepreneurs anticipating year-over-year revenue growth and indicating plans to hire and expand in the year ahead, according to the fall 2018 Bank of America Business Advantage Small Business Owner Report. That said, a historically tight job market is complicating expansion plans as New York entrepreneurs find themselves in greater competition to retain and hire talent.
The report, based on a semiannual survey of 1,000 small business owners across the country and the greater New York City area, reveals that 77 percent of New York entrepreneurs are confident their year-end revenue will exceed that of 2017. In addition, over the next 12 months:
- Fifty-seven percent of New York business owners believe their revenue will increase (vs. 53 percent in fall 2017).
- Seventy-two percent plan to expand (vs. 69 percent in fall 2017).
- Thirty-four percent plan to hire (vs. 25 percent in fall 2017, and the highest level in two years).
- Forty-seven percent are confident the national economy will improve (vs. 48 percent in fall 2017).
- Forty-five percent express similar confidence in the New York economy (level since fall 2017).
- Twenty-two percent intend to apply for a loan (the highest level in three years, and 7 percentage points above the national average).
“New York business owners are seeing revenue growth and eyeing business expansion in 2019,” said Corey Price, New York small business banker manager at Bank of America. “We’re witnessing multi-year highs in hiring and loan application plans, but a highly competitive talent market has entrepreneurs facing a growing challenge with respect to talent retention and acquisition.”
Heightened competition for New York talent as small business hiring ramps up
As 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 23 percent of all New York entrepreneurs. Among New York 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 who sought to hire in the last year have modified their hiring strategies to find and recruit top talent by:
- More actively using social media (20 percent).
- Shifting to a more flexible culture in terms of hours, location and extra time off (19 percent).
- Offering higher salaries (17 percent).
When it comes to the top characteristics New York business owners look for in potential job candidates, they primarily value passion for the work and mission of the business (48 percent), integrity (47 percent), previous work experience (45 percent) and the ability to learn new skills (40 percent).
Concern over most economic issues fade; worry over health care costs reaches five-year low
In correlation with positive business forecasts, the survey found a general trend of declining concern over most economic factors that are tracked. Health care costs remain the top concern for New York entrepreneurs at 59 percent, but concern has decreased 7 percentage points year-over-year and is at a five-year low.
Perhaps a result of recent changes to and uncertainty about trade policies, 47 percent of New York business owners identify U.S. trade policy as an economic concern, making it the third highest concern for entrepreneurs today. Forty-five percent say the latest tariffs/U.S. trade policies have impacted their business, with 17 percent reporting a negative impact, 15 percent reporting a positive impact and 13 percent reporting both positive and negative effects.
New York small business owners feel the holiday spirit; recommend entrepreneurship as a career path
New York business owners are feeling the holiday spirit as 86 percent plan to offer at least one holiday perk to their employees. The top holiday perks planned this year are office closures (49 percent), flexible hours or vacation time (39 percent) and salary bonuses (38 percent). Finally, despite unique challenges in managing a small business, New York entrepreneurs love what they do. Eighty-nine percent say the added stress of entrepreneurship has been worth it, and 91 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 and for additional insights, download the Small Business Owner Report infographic.
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
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.
Reporters May Contact:
Susan Atran, Bank of America, 646.743.0791