Welcome & Introductions

Transcription

1 Welcome & Introductions Moderator: Rob Basso President, Advantage Payroll Panelist: Dr. Martin Cantor, CPA Panelist: Doug Manditch CEO & Chairman Empire National Bank

2 What are we seeing on LI? A shrinking workforce A growing influence on the service sector as higher paying manufacturing and construction jobs continue to decline Lower paying service sector jobs will create less spinoff jobs, so we need to focus on creating a healthy, vigorous service sector

3 What is this survey about? Is what small business owners are seeing in the trenches the same as the headlines we read every day? Is the economy rebounding? Do they foresee growth in their industry? Are companies planning on staying? How are people attracting and retaining employees? Are business owners worried about the ACA?

4 Why did we conduct this survey? To provide valuable information to help them run their business To help business owners better compete in a reshaped economy To determine the current needs of Long Island s service sector necessary to sustain their current businesses and employment levels To determine the future needs the service sector will require to expand and grow their businesses and employment bases here on Long Island and not elsewhere

5 Who are the service companies that participated in this survey? building maintenance/landscaping legal services food related/restaurants medical services/heathcare related retail/wholesale motor vehicle/auto related services financial/insurance/business services entertainment/recreation

6 About the respondents: 68.0% had gross revenues less than five million dollars 32.0% reported gross revenues greater than five million 50% have between none and 10 employees 50% have between 11 and 400 employees The companies represent employed 1,969 persons The companies surveyed paid $36,766,917 in wages to their employees in 2011

7 Revenue: Increase or decrease? 40.0% reported that their gross revenues had decreased from % reported that their company gross revenues had increased 6.7% reported that their 2012 gross revenues had not changed from 2011

8 Employees: increase or decrease 41.7% of companies reported their employee workforce decreased from 2011 to % reported increases in employees 27.1% reported no change in their employees

9 Wages: increase or decrease? 32.5% of companies decreased in % reported higher employee wages 7.5% of the companies reported that the wages of their employees remained unchanged

10 Employee benefits: Are you keeping up? 52.9% provided pension benefits Health care being provided by 80.4% 74.5% provided disability benefits

11 Growth strategies: Finding Qualified Employees 80.0% agreed that finding qualified employees was important to the growth of their company In the ability to find new employees, 57.4% disagreed that they were unable to find qualified labor on Long Island 42.6% responded that they had difficulty finding qualified labor on Long Island

12 Capital Formation: Is it important? 86.2% of respondents agreed that capital formation was important for their company s growth 13.8% of respondents didn t think it was important 53.8% of respondents had not attempted to raise capital 46.2 percent of the respondents had attempted One of the indicators why more respondents did not attempt to raise may be the level of difficulty 43.5% disagreed or strongly disagreed that they were successful in raising capital 56.4 percent had been successful in raising capital

13 The Importance of Bank Lending 69.2& reported that bank lending was important to the growth of their company 48.1% said that they have tried to obtain bank financing 51.9% said that they have not 50% were successfully able to seek bank lending

14 Local, State and Federal Taxes and Energy Costs 65.4% agreed that property taxes were important to the growth of their company 84.7% agreed that New York State business taxes were important to their company s growth 86.5% agreed that reducing Federal taxes was important to their company s growth 84.7% agreed that energy costs financially impact the finances of their companies

15 Government Impact on Business Growth 75% agreed that complying with New York State regulations was burdensome to their company. Agreeing that Long Island governments are not business friendly was 52.1% The importance of Long Island government to the growth of their company was agreed to by 73.5% of the respondents

16 The Long Island Economy: Current and Future Outlook 64.6% disagreed that the Long Island economy had improved since % did not have strong feelings that the economy had improved 10.4% agreed that the Long Island economy had improved 33.3 percent disagreed that the economy will improve 27.1 percent agreed that the economy will improve 39.6% somewhat agreed the economy will improve

17 Relocation & Outsourcing: 66.0% disagreed that Long Island s high costs would force their companies to relocate away from Long Island over the next five years 34.0 percent of the respondents somewhat agreed to strongly agreed that they would relocate The projected loss of service sector jobs is troubling since this sector is leading Long Island out of the recession 82% said that their company is not considering outsourcing jobs to states with lower labor costs

18 Growth and Contraction 72.5% agreed that Long Island s service sector will grow over the next five years percent disagreed that the service sector would grow. 66.7% disagreed/strongly disagreed that Long Island s service sector would contract over the next five years. 33.3% felt that the region s service sector would contract. Having two thirds of the respondents feeling that there would be no contraction of the services sector bodes well for Long Island s service sector.

19 The Affordable Care Act: Concerns of the Service Sector Business owners show extreme concerns about the anticipated administrative and financial impact of changing Human Resource regulations and the Affordable Ccare Act. 56.9% agreed that they would be unable to keep up with the changing Human Resources regulations and the new Affordable Healthcare Act. When asked if they would consider outsourcing their Human Resources functions or improving their technology to remain compliant with regulations and requirements, 70% disagreed Only 30 percent of respondents agreed that they would. Overwhelming concern was expressed by respondents over the cost of compliance with the new Affordable Care Act. 78 percent of respondents agreed that they were concerned

20 Interesting Correlations 45% of the reason for company employee growth was increased employee wages paid 31% of the reason for employee wage increases was increases in revenues 64% of the reason for the amount of employees was the wages paid 43% of the reason for the level of gross revenues was the company category 33% of the reason for the level of wages paid was the company category This survey found there are strong correlations between increase in employees hired, gross revenues, and an increase in employee wages. This suggests that as the revenues grow in the service sector so will the increase in employees and the wages that they earn.

21 What does this all mean? This survey reveals that while the service sector is growing within the Long Island economy, there is a definable indication of the service sector s unrest with Long Island s high property taxes and energy costs, high Federal taxes, New York State s burdensome regulations and taxes, lack of government support for business, and difficulty in raising capital and securing bank financing. Businesses are STAYING despite high costs, taxes, and regulations. Nearly 66 percent of the respondents disagreed that they would leave Long Island over the next five years. Labor is staying here very little are considering outsourcing. 82% of respondents disagreed that they would consider outsourcing their labor to lower labor cost states. The service sector: businesses divided over future growth, but confident that the industry will not shrink Businesses are concerned about complying with the ACA, but are not making plans to hire in anticipation of complying

22 How will this affect YOUR business? The biggest finding in this survey: The most successful respondents who saw increases in revenue paid their employees well and retained those employees Companies who saw decreased revenues had lower paid employees and lost employees

23 So what should you do? Look at what you are doing to retain your employees and implement new policies Make sure you are prepared for the ACA Feel more confident that businesses are not moving off LI which should help you make long term business decisions