Central Ohio Family Business Leaders See Bright Economic Climate in Annual Family Business Forecast
* An updated Family Business Forecast post can be viewed HERE.
The ninth Annual Family Business Forecast, conducted by the Conway Center for Family Business, revealed significant growth in optimism about the economic and business health of the national economy for 2020. A majority of respondents (98.25%) feel somewhat or very good about the U.S. economic outlook. Those feeling “very good” about the national economy (42.11%) increased by more than 14 percent from 2019 (27.42%).
Similarly, family business leaders are increasingly optimistic about the business climate in Central Ohio (98.25%) with 56.14% choosing the highest rating of “very good” and 42.11% choosing “somewhat good.” The steady level of leaders choosing the most optimistic rating indicates durable confidence in the local economy.
The ninth Annual Family Business Forecast, conducted by the Conway Center for Family Business, revealed significant growth in optimism about the economic and business health of the national economy for 2020. A majority of respondents (98.25%) feel somewhat or very good about the U.S. economic outlook. Those feeling “very good” about the national economy (42.11%) increased by more than 14 percent from 2019 (27.42%).
Similarly, family business leaders are increasingly optimistic about the business climate in Central Ohio (98.25%) with 56.14% choosing the highest rating of “very good” and 42.11% choosing “somewhat good.” The steady level of leaders choosing the most optimistic rating indicates durable confidence in the local economy.
The Conway Center fields the Annual Family Business Forecast to gauge the economic climate – including employment and related challenges – among family businesses in the region.
The Conway Center fields the Annual Family Business Forecast to gauge the economic climate – including employment and related challenges – among family businesses in the region.
Family Businesses Plan to Hire, but Struggle Finding the Right Candidates
The bullish outlook on the economy translates to a strong emphasis to hire in 2020, consistent with the past several years of the survey. Family business leaders indicated a desire to increase in hiring in 2020, with more than two-thirds (68.85%) planning to add employees in 2020. Finding qualified workers is a growing top concern among family business leaders (48.28%), up two percent from 2019 while concerns about securing and maintaining clients (20.69%) and competition, online (8.62%) and traditional (5.17%) are among other sources of unease.
Family Owned Businesses Drive Job Creation
“Family businesses in Central Ohio continue to grow and adapt to changing market conditions, as evidenced by a strong majority expecting to add jobs in 2020,” said J. Richard Emens, President of the Conway Center for Family Business. “This continues the very positive trend we’ve seen over the past eight years, with more family businesses showing confidence in the local economy and indicating they’ll hire.”
Statistics show family businesses account for 64 percent of the U.S. gross domestic product, generate 62 percent of the country’s employment, and spur 78 percent of all new job creation.[1]
“We’re encouraged to see family businesses are as committed as ever to building a thriving company in Central Ohio,” Emens said. “While it’s a significant challenge, local family business leaders are working hard to find new ways to recruit and retain the most skilled and qualified candidates to fill specific roles, especially in skilled trades. For six consecutive years, this has been the biggest challenge for family businesses in Central Ohio.”
The
Conway Center addresses these challenges through educational programs and by
tapping service provider experts to help family businesses attract, train, and
retain top talent.
Finding Qualified Workers, “The Right Fit,” Remains Difficult
Asked about their top hiring challenges, 62.07% of survey respondents cited finding skilled and qualified workers. Finding employees that fit with the company culture (18.97%) is another major challenge.
“Many of our members request programs on recruiting and hiring for the long-term, including creating and nurturing company culture, and leadership development among non-family employees,” said Jill Hofmans, Conway Center Executive Director and Vice President. “Our members use all resources available – online job listings, employee referrals, recruiters, internal promotion – to find employees who understand that family businesses work hard and expect non-family employees to have an “ownership” attitude as well. The intangible benefits –flex time, work-life balance and a family-like atmosphere of caring for all employees – add value that can’t be calculated in a job description.”
Family Business Leaders Searching for Candidates through Referrals, Job Listings, and Social Media Ads
Because less than half of family businesses will look to internal promotion to fill open positions (46.55%), leaders are getting creative to find qualified help. When asked where they will look for new hires, 77.59% said they will seek talent through employee or personal referrals; 70.69% through traditional and online job listings. More than one-third (36.21%) are now using social media advertising to reach the right candidates.
Cost of Living, Public Infrastructure Makes Columbus a Great Place to Have a Family Business
When asked about the top three qualities that make Central Ohio a desirable place to run a family business, those surveyed indicated the region’s cost of living (69.64%), infrastructure (58.93%), and economic direction (48.21%) were great reasons to stay.
“Columbus is as great of a place to call home as it is to do business,” said Emens. “The resources in place, combined with the collaborate business culture within our community are major contributors to the region’s economic rise, and why Central Ohio is a great place to start – and keep – a family business.”
Sales forecasts and volume continue to drive the positive economic outlook and decisions to increase employment. About two-third of family business leaders (67.50%) said sales forecasts/volume will be the biggest factor that will impact their decisions to increase or decrease employment, with compensation (35.00%) remains a steady factor in hiring decisions. “Health Care Costs” (20.00%) grew to the third largest factor for hiring decisions, slightly ahead of “Benefit Costs” (17.50%).
Industry competition overall (13.79%) fell as a business challenge as family business leaders cited “securing and maintaining clients” as the most significant challenge to their business in 2020. Traditional competition accounted for 26.2% of these responses, while 12.3% of responders specifically cited online competitors. This was the first year “securing and maintaining clients” was included in the survey.
Potential Federal Tax Increase, Ohio Gas Tax Increase Expected to Negatively Impact Business
When asked how recent national and local policy issues will affect family business on a scale of 1 (significantly negative) to 5 (significantly positive), the average response of three issues, climate change (2.95), Ohio’s minimum wage increase (2.82), and federal tax legislation (2.64), were indicated as issues that would least impact family businesses in 2020. Any increase in federal interest rates (2.35) and Ohio’s gas tax increase (2.45) were expected to have a most negative impact.
*The survey was completed by 61 family business leaders in and around Franklin County.
About the Conway Center for Family Business
The Conway Center for Family Business is Central Ohio’s resource for educational programs, resources and networking opportunities to support the growth and success of family-owned businesses. The Center celebrates the successes of family-owned businesses at its annual awards program and offers peer group opportunities for next-generation leaders, family business leaders, and women family business owners. The organization includes more than 200 family-owned businesses from Central Ohio that employ more than 35,000 individuals.
[1] Astrachan, J.H. and Shanker, M.C. (2003), Family Businesses’ Contributions to the U.S. Economy: A Closer Look.