Business leaders around the state believe there are many good reasons to do business in Nevada, but the state’s favorable tax structure was cited by most respondents as the top business benefit, according to the First Independent Bank Nevada Leaders in Business Survey. Conversely, the biggest challenge cited by those surveyed was quality and availability of workforce.
For the second consecutive year, First Independent Bank and Bank of Nevada, both divisions of Western Alliance Bank, asked business leaders to identify the challenges, benefits, and issues that are important to the state’s business community. The Nevada Leaders in Business Survey was conducted by WestGroup Research between Feb. 6 and March 2. More than 120 business leaders provided their opinions, representing companies of all revenue and employee sizes.
“It is important that Nevada’s business community has the opportunity to express opinions about the challenges and policies that affect their business operations,” said Bob Francl, executive vice president, regional president, First Independent Bank. “The Nevada Leaders in Business Survey helps shine a spotlight on many of these concerns, which we hope will lead to further discussion and possible solutions.”
Business Challenges
The latest survey found stronger feelings about some of the challenges faced by Nevada businesses, when compared to last year’s results. The majority (62 percent) cited concerns about quality and availability of workforce. That’s up from 51 percent in last year’s survey. The education system remained the second (50 percent) most often cited challenge — the same percentage as last year. Healthcare costs came in third (39 percent) up slightly from last year (37 percent), followed by employee recruitment (27 percent) up from 21 percent in 2017, and then business taxes (12 percent) and business regulations (12 percent). Tax and regulation concerns were down significantly which may be due to passage of the Tax Cuts and Jobs Act of 2017, and the current administration’s regulatory pullback.
Northern Nevadans see business challenges differently, according to the survey. There were stronger feelings about the quality and availability of workforce based on the seven in 10 business leaders (68 percent) who believe it’s the biggest challenge. Northern Nevadans were more concerned about healthcare costs, as 58 percent cited it as a challenge, compared to 39 percent statewide. Another workforce issue, employee recruitment, was identified by 39 percent of Northern Nevada respondents, which is also higher than statewide. Northern Nevada business leaders appear to be less concerned about the education system, as just one quarter (26 percent) of respondents cited it as a challenge, down significantly from last year’s 47 percent.
Top Challenges of Doing Business in Nevada (Northern Nevada results)
Quality/availability of workforce — 68 percent
Healthcare costs — 58 percent
Employee recruitment — 39 percent
Education system — 26 percent
Business taxes — 10 percent
Business regulations — 7 percent
Business Benefits
Statewide, respondents saw many benefits of doing business in Nevada, but the favorable tax structure was the one chosen by most (65 percent) as the greatest benefit. This is a significant increase from last year’s survey when 51 percent chose it. Nevada’s climate/weather was second with 51 percent, followed by quality of life (42 percent), low cost of doing business (41 percent), proximity to customers (27 percent), entrepreneurial mindset (25 percent) and top convention destination (7 percent).
When looking only at Northern Nevada responses, the ranking of business benefits changed. Those in the northern part of the state are much more enthusiastic about the quality of life in the region (71 percent), making it the top business benefit. Nevada’s favorable tax structure was the second (55 percent) most cited choice, followed by equal rankings of climate/weather (36 percent) and low cost of doing business (36 percent).
Top Benefits of Doing Business in Nevada (Northern Nevada results)
Quality of life — 71 percent
Favorable tax structure — 55 percent
Climate/weather — 36 percent
Low cost of doing business — 36 percent
Proximity to customers — 29 percent
Entrepreneurial mindset — 13 percent
Positive Impact on Nevada
Survey takers statewide were asked to identify which action or condition would have the most positive impact on Nevada. Most identified increasing the pool of STEM graduates (62 percent) followed by enhancing Nevada’s image (59 percent) and increasing access to capital (33 percent).
In Northern Nevada, enhancing Nevada’s image collected the most responses (52 percent), which is down significantly from last year’s survey when 69 percent felt this way. Fewer than half (48 percent) chose increasing the pool of STEM graduates, which is also lower than last year’s 55 percent, and 23 percent said increasing access to capital would have the most positive impact on the state.
Affordable Housing vs. Education
Survey results also showed a shift among Northern Nevada business leaders who prioritized affordable housing higher than improving K-12 education.
When asked what local government could do to improve the business climate, more than half (55 percent) of Northern Nevadans said approve more affordable housing, followed by improve K-12 education (52 percent). When asked what action state government could take to improve business climate, 58 percent said create more affordable housing, less than half (48 percent) said increase K-12 funding.
Labor Pool Strengths
Statewide, Nevada’s workforce gets high marks for a number of positive attributes. Six out of 10 business leaders identified a willingness to learn (62 percent) up from 45 percent last year, adaptability/flexibility (43 percent) up from 41 percent in 2017, followed by teamwork (40 percent) which is the same percentage recorded last year.
Labor Pool Weaknesses
There’s also strong agreement on what is lacking in Nevada’s workforce. Problem solving/critical thinking skills along with math/science skills were both identified by more than half (52 percent) of respondents. This is up significantly from last year. Other weaknesses identified in the workforce include self-motivation (48 percent), leadership (48 percent), communication skills (47 percent) and analytical skills (45 percent).
Business Confidence
Consistent with last year, the vast majority (87 percent) of Nevada business leaders are very/somewhat confident their company’s revenues will grow over the next 12 months. Seven in 10 (69 percent) business leaders agree there are more growth opportunities for their company today than there were three years ago. Three in 10 (29 percent) business leaders strongly agree with this statement, which is up from 17 percent last year.
To download results of the complete survey, go to www.firstindependentnv.com/survey2018.