The region’s businesses are ready to get back to growth in 2021 after a year of riding out the COVID-19 pandemic, says a new study by accounting and advisory firm LBMC — and that looks to be good news for in-demand talent.
Of the nearly 520 people who responded to LBMC’s survey — more than half of them from organizations with more than $15 million in revenue and at least 50 employees — a shade under 70 percent said growing sales is a top business goal for the year. That answer beat out No. 2, improving financial performance, by 15 points.
Not far below the surface, though, is the ongoing battle for personnel talent. A year ago, unemployment in the Nashville MSA was 2.5 percent and, while it finished 2020 at 5.2 percent, many types of positions less affected by the pandemic remain in very high demand, LBMC Accounting and Assurance Practice Leader John Mark McDougal told the Post. Growth investments this year are likely to be more focused on people than on equipment and software systems, he said, especially at fast-growing firms.
“Companies are going to squeeze their existing infrastructure as much as they can,” he said. “No one wants to fight five battles at the same time.”
More than 31 percent of LBMC’s respondents said they actually added positions in 2020, which speaks both to a measure of optimism about mid- and long-term prospects and to the idea that COVID has only marginally affected a number of companies. Fully half plan to hire more this year, with more than seven out of 10 high-growth businesses looking to do so.
Still, there are also notes of (continued) caution in the LBMC report:
• More than 42 percent of respondents expect the election of President Joe Biden will have a negative impact on the business environment, specifically in terms of taxes and regulations.
• While executives are still more upbeat about the regional economy than the U.S. or world situations, optimism about the region fell substantially more than that about the country as a whole. McDougal said that likely reflects Tennessee’s predominantly Republican attitudes about the election.
• The environment for mergers and acquisitions remains positive but fewer than 15 percent of businesses are considering doing a deal this year. McDougal said players on both sides of strategic and tuck-in transactions have reasons to pull back for a bit: Buyers want to be sure the businesses they’re eyeing can perform as they thought they did prior to COVID and sellers want more time to have the recovery increase their value.
More broadly, McDougal said a broader sense of cautious optimism is now becoming the norm. Leaders are more informed than ever about the risk factors they face and the things that could go wrong. Plans are still being hatched but backup plans are becoming ever more important.
“The volatility in operating a business is at an all-time high,” McDougal said. “The comfort levels aren’t high.”
For more info on the LBMC report, click here.