LOS ANGELES — A small business survey by 1st Century Bank, a division of MidFirst Bank, and Beacon Economics finds continued optimism among Los Angeles’ small businesses heading into the new year.
The fall "Los Angeles Small Business Attitudes Survey" polled small business owners on a host of issues. A low unemployment rate and a tight labor market have created challenges for many businesses trying to find qualified candidates. In fact, 22 percent of firms report increased salary expectations and significant competition for employee talent.
The survey also revealed overall employment has increased over the past six months with millennials making up the largest share of current employees (40 percent). Some 67 percent of businesses reported they spend most of their efforts and resources trying to attract millennials, compared to 1 percent targeting baby boomers.
“This trend in employment is resulting in substantial changes within business infrastructures and attitudes,” said Jason DiNapoli, CEO and President of 1st Century Bank. “Small businesses in Los Angeles are adapting by changing workplace policies and adjusting work environments to attract a younger workforce.”
The survey also revealed:
- 87 percent of businesses reported having problems recruiting employees with needed skills – 35 percent cite a shortage of qualified candidates and 21 percent indicate office location or commute times as the primary cause
- 75 percent of businesses were having trouble retaining current employees with 26 percent indicating poaching from other firms, while 24 percent say it is the inability to provide competitive compensation
- Younger generation workers care more about flexibility and time-off arrangements than they do about office amenities or work atmosphere
- Finally, the 2017 Tax Cuts and Jobs Act seems to have fallen out of favor. While a substantial 79 percent of businesses supported the TCJA in fall 2018, this has now dropped to 54 percent. The businesses who believe the TCJA has had a positive impact on their business has dropped to 31 percent, down 39 percentage points from fall 2018.
“Our fall survey revealed interesting hiring trends and challenges that small business owners are experiencing while recruiting qualified workers,” said Adam Fowler, research director at Beacon Economics. “Still, there is optimism and a positive outlook for the remainder of this year and moving into 2020.”
Survey participants included CEOs, managing partners and chief financial and technology officers, among others. The majority of company leaders polled operate small businesses with less than 75 employees.
1st Century Bank is a division of MidFirst Bank, one of the nation’s largest privately held financial institutions. This combination of private ownership, a strong capital base and local market focus and expertise, allows 1st Century Bank to provide greater scale and opportunity for its clientele. 1st Century Bank’s exceptional service model provides the flexible, local decision-making that has distinguished it in the Los Angeles market.
