Small and mid-sized businesses in the USA are bullish about the economy. That’s good news since they are typically the closest to customers. Their views are formed by the number of daily business transactions and cash flow. The soaring stock market in 2017 is also a reason.
Here are the specifics, according to an annual survey by JP Morgan:
89 percent of mid-sized businesses are optimistic about the U.S. economy, up nine points versus a year ago.
Nearly two-thirds of small businesses are upbeat, which is similar to a year ago.
JP Morgan defines medium-sized businesses as those with $20-$500 million in annual revenue and small businesses in the $100,000-$20 million annual revenue range. Interestingly, these categories make up the bulk of our Ohio Restaurant Association members, and are the lifeblood of the robust restaurant industry.
Now the tough news, although this is not really “news” as we’ve discussed workforce challenges on a regular basis. According to JP Morgan:
Half of all small business owners are pessimistic about managing labor costs, up four percent from last year.
The limited supply of talent is another top concern. About 54% of mid-size businesses said a limited supply of talent in the employment pool would be a “top challenge” in 2018, up 10 points from last year. This marks the fourth-straight year an increasing percentage of firms have listed this as a challenge.
The JP Morgan survey points out that the top concern among businesses is something economists and leaders have been concerned about — finding and retaining qualified workers. In the restaurant industry, this means general managers, shift leaders, cooks, servers, hosts, etc. Our industry also faces relatively thin profit margins versus other industries, so significantly increasing labor costs is not an option.
There are no easy answers to this challenge. We’ve mentioned in this blog before and in other ORA communications that the Human Resources committee is operating at the ORA to identify solutions and to share them with our members. We know a comprehensive approach to workforce and labor is required by every restaurant owner, including a focus on people – culture, training, total compensation, benefits and career development. Our work is under way and we look forward to sharing more as we make progress.