Houston Entrepreneurs Are Successfully Navigating a Tight Job Market
Local entrepreneurs are finishing 2018 on a high note, with most Houston-area small business owners reporting anticipated year-over-year revenue growth and indicating plans to expand in the year ahead, according to the fall 2018 Bank of America Business Advantage Small Business Owner Report. The majority of business owners are pleased with the direction of the local economy and — bucking a national trend — Houston entrepreneurs are finding ways to land qualified employees in a historically tight job market.
The report, based on a semiannual survey of 1,000 small business owners across the country and the greater Houston area, revealed that 86 percent of Houston entrepreneurs are confident their year-end revenue will exceed that of 2017 revenue. In addition, over the next 12 months:
“Since last year, a significantly higher number of Houston business owners are confident in their local economy, translating into strong optimism toward year-end revenue and future expansion,” said Elizabeth Romero, Southwest small business division executive at Bank of America. “While small business owners in most other major cities are facing the challenges of a highly competitive labor market, Houston entrepreneurs are finding ways to secure the talent they need to drive continued growth.”
Houston business owners are making plans to hire in the year ahead, but at the same time, retaining employees has become a significant challenge. In the last year, turnover affected 30 percent of Houston entrepreneurs. This said, Houston entrepreneurs are subverting a nationwide challenge when it comes to talent acquisition. Among business owners who sought to hire new employees, 59 percent say it was easy finding qualified candidates.
However, when Houston business owners looking to hire were unable to find the right employees, repercussions were severe — 74 percent of that group say their inability to find qualified candidates limited business growth, tied for the highest percentage nationwide.
When it comes to the top characteristics Houston business owners are looking for in their potential job candidates, entrepreneurs primarily value integrity (55 percent), previous work experience (51 percent), passion for the work and mission of the business (44 percent) and the ability to learn new skills (44 percent).
In correlation with positive business forecasts in Houston, the survey found a general trend of declining concern over most economic factors that are tracked. Health care costs remain at the top of the list (60 percent), although concern has dropped from 67 percent last fall. Concern over corporate taxes dropped three percentage points since last year, with 44 percent still identifying this as a burdensome issue nearly a year after the enactment of U.S. tax reform.
Perhaps a result of recent changes to and uncertainty about trade policies, 40 percent of Houston business owners identify U.S. trade policy as an economic concern. Forty-nine percent say the latest tariffs/U.S. trade policies have impacted their businesses, with 22 percent reporting both positive and negative effects, 14 percent reporting a negative impact and 14 percent reporting a positive impact.
Houston business owners are feeling the holiday spirit as 89 percent plan to offer at least one holiday perk to their employees. The top holiday perks being offered are office closures (59 percent), salary bonuses (40 percent) and flexible hours or vacation time (40 percent). Finally, despite unique challenges in managing a small business, Houston entrepreneurs love what they do. Eighty-nine say the added stress of entrepreneurship has been worth it, and 90 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, 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:
Britney Sheehan, Bank of America