Hispanics make up 18.1% of the US population with close to 60 million people, and more Hispanic entrepreneurs are serving this population.
According to the 2019 Bank of America Hispanic Small Business Owner Spotlight (PDF), 87% of Hispanic entrepreneurs plan to expand their business this year. This translates to 20% higher than non-Hispanic business owners.
Hispanic business owners get their optimism from the community they serve, family and their employees. And this has led to exceptional growth, exceeding the expectations of owners when they started their venture.
Still, for these entrepreneurs, a tight labor market is making it much harder to find the right talent and keeping them. Elizabeth Romero, Small Business Central Division executive from Bank of America says this is one of the challenges this demographic is facing.
In a release, Romero said, “As Hispanic entrepreneurs look to augment growth plans by hiring, today’s competitive job market has created an especially difficult environment to attract and retain talent.”
GfK Social and Strategic Research carried out the survey for this year’s report between August 30 and October 16, 2018.
A national sample of 1,067 small business owners in the US made up of Hispanic and Non-Hispanic small business owners took part in the survey. These are businesses with 2 to 99 employees generating revenue between $100,000 and $4,999,999.
The study then compared the results of the survey to national benchmark standards for size, revenue, region, and whether the respondents were English or Spanish-speaking.
Hispanic Entrepreneurs in 2019
Beyond this year, 79% of Hispanics said they plan to grow their business over the next five years. Meanwhile, only 55% of other entrepreneurs expressed growth plans.
In 2019, close to 3 in 4 or 74% Hispanics also expect their revenue to increase, with 51% planning on hiring new workers. This is where they will be facing challenges as the labor market continues to tighten.
In 2018, all businesses experienced challenges in finding qualified talent. But 58% of Hispanic entrepreneurs experienced these challenges, and it is harder for them to find and retain talent.
The turnover rate for Hispanic owned businesses affected 45% of organizations, while the rest of the segment experienced a 24% rate.
When it is time hire, it is taking longer to do so. It takes three months or more to fill a position and the difference here is pretty much the same for everyone. Forty-five percent of Hispanic business have to wait that long, while it is 40% for non-Hispanics owners.
The time also extends to the process of hiring a person, with Hispanics saying it takes them more than 10 hours to make it happen. The number is 13% lower for non-Hispanics.
Adapting to the new Job Market
It doesn’t matter whether you are a Hispanic business owner or not, if you don’t adapt your hiring practices to the new job market, it will take you longer than ever to fill your open positions.
According to Bank of America, businesses will have to refine their hiring and recruiting approach in this ultra-competitive job market. In the report, 75% of Hispanic owners are making these adjustments, compared to 55% of other business owners.
More Hispanic owners are using social media to find and recruit talent (32% to 23%), establishing a more flexible culture in the workplace (27% to 25%), and offering higher salaries (26% to 17%).
Some of the other benefits Hispanic business owners are offering include flexible hours and work location, professional development, discretionary bonuses, healthcare, and retirement benefits.