Nearly three in four business owners said they were challenged to find appropriate staffing in 2021, and nearly the same amount raised wages – some considerably – to help offset their workforce shortage, according to NJBIA’s 2022 Business Outlook Survey, released today.
But the continued post-pandemic challenges of staffing, mandates, restrictions and lower revenue have caused some to re-evaluate how long they want to keep their businesses.
28% said they will look to sell or cease their business sooner than previously anticipated due to continued obstacles, while 31% said they are still determining if their plans will change.While 37% said there is no change in their future plans due to the challenges of the past 20 months,
Some responses in NJBIA’s 63rd annual Business Outlook Survey include:
- 73% said they were challenged to find appropriate staffing in 2021 (48% said they were considerably challenged, while 25% described the challenges as manageable)
- Those who were challenged to find staff reported the following impacts on their bottom line:
- 57% reported available staff was more stressed or burnt out
- 51% lost revenue
- 50% increased wages higher than they wanted or could afford
- 45% reported service to their customers suffered
- 32% hired staff with lower qualifications
- 24% reduced hours/days open
- Those impacted businesses reported the following hiring experiences in 2021:
- 57% had scheduled interviewees who didn’t show up; 46% had interviewees who canceled their interviews
- 49% had candidates who said they wanted to remain unemployed to collect unemployment benefits
- 27% had candidates who asked to be paid off the books so they could continue to collect unemployment
- 26% had candidates who said childcare challenges impacted their ability to return to work
- 79% said they were impacted by supply chain issues and delays more in 2021 than in previous years
- 52% said they believed businesses that offered remote work flexibility put in-person only employers at a competitive disadvantage
- While wages were up in 2021, respondents were mixed the notion of resolving hiring challenges by having to pay more:
- 39% said they believe staff pay should only be commensurate with the economic value of the position and what they could afford as an employer
- 33% said they now believe they’ll have to pay beyond the economic value and what they can afford in order for their business to be competitive
- 16% said they always believed they should pay beyond the value of the job to be competitive
33% predicted they will hire more, compared to 9% which predicted less hiring – a +24% net positive hiring outlook and 9% higher than the outlook for 2021.Looking to 2022,
Some 33% of employers increased pay for employees by 5% or more in 2021 – compared to 12% who increased pay 5% or more in 2020. All totaled, 72% increased wages this year – compared to 54% who raised pay in 2020.Wages
with 43% claiming an increase in sales this year – compared to the meager 19% that saw more sales in 2020 due to the pandemic.Sales Actual sales rebounded for New Jersey businesses in 2021,
the exact percentage of businesses projected the same sales next year as they forecasted in 2020. A total of 46% anticipate increased sales in 2022, compared to 23% who foresee less sales. Prior to last year, the +23% net positive outlook was the lowest since 2015.Remarkably,
38% believe they will make a profit, compared to 26% who think they will lose money. That net positive of 12% is the lowest outlook for profits in this survey since 2012.What hasn’t improved is businesses’ outlook for profits. Last year, there was a net positive of only 14% believing they would report a profit in 2021. In 2022, however,
54% of businesses said they made investments to productivity. That’s a slight increase from 50% in 2020, but still off the mark from the pre-pandemic years of 2019 (62%), 2018 (61%) and 2017 (60%).In 2021,
The overall cost of doing business was listed by 28% as the most troublesome for businesses in New Jersey, breaking a four-year streak where property taxes held the unenviable top spot.New Jersey’s Challenges
Fifty-nine percent of respondents said they had no plans to expand, while 25% said they would expand in another state, compared to 10% that would expand in New Jersey.New Jersey’s Economic Climate A continued reluctance for businesses to expand in New Jersey remains.
only 22% listed New Jersey as very good or good, while 30% described it as fair and 48% ranked it as poor.As a location for new or expanded facilities,
Only 11% said they believe New Jersey has made progress over the last year in easing regulatory obstacles. That number has declined steadily from 24% in 2017.
Only 36% said they are planning to keep New Jersey as their domicile in retirement – a 4% bump from last year, but still a consistent indication of the state’s low appeal for people in their golden years.
New Jersey’s performance compared to other states was fairly similar to past years. However, New Jersey’s workforce issues in 2021 changed one key metric.New Jersey’s Competitive Levels
In 2021, most (42%) rated New Jersey’s economy as fair, while 29% described it as poor, 25% listed it as good and only 3% called it excellent. These numbers are somewhat improved from the pandemic-laden year of 2020.NJ and US Economic Outlooks
Only 26% said the first six months of 2022 would be better, compared to 41% who said it will be worse. That’s a -15% net outlook for the national economy, likely impacted by inflation, supply chain issues and concern of increased taxes.There were bigger changes, however, in the outlook for the U.S. economy.
When it came to workplace safety, however, 29% said they were greatly concerned about maintaining it, while 32% said they were moderately concerned. Thirty-four percent said they were not concerned at all.