The availability of a skilled workforce is the biggest constraint on business growth for private businesses in the United States, according to the Grant Thornton International Business Report (IBR). While it is the largest U.S. constraint overall, only a quarter (26 percent) of U.S. private businesses rank it as a major issue, a decrease from 34 percent for the same category in 2007 and notably less than the current global average of 37 percent.
A minimal percentage of U.S. private businesses report constraints in the other five categories: reduced demand (19 percent), cost of finance (16 percent), shortage of working capital (16 percent), regulations and red tape (16 percent), and shortage of long term finance (11 percent). The U.S. ratings are also lower when compared to NAFTA, EU, and global averages.
"Despite the exploding global population and an increasing amount of people in the workforce with advanced degrees, U.S. privately held businesses are still struggling to find the right people," said Mike Hall, Midwest regional managing partner and partner in charge of Grant Thornton LLP's private company initiative. "These workforce issues combined with other business constraints and the current state of the economy amount to a challenging period in the short term for businesses across the globe. However, as businesses address these issues and meet the challenges, they will be increasingly well positioned to be successful in the very dynamic global environment."
In comparing the global averages, for the first time this century, regulations and red tape have been replaced by workforce issues as the number one problem holding back privately held businesses. Thirty-seven percent of privately held businesses (PHBs) report the availability of a skilled workforce as a constraint on business development, up from 34 percent in 2007. The number of businesses reporting regulations and red tape have dropped from 37 percent to 31 percent.
About the Survey
Grant Thornton International started a major annual survey of the attitudes and expectations of small and medium-sized businesses in European countries in 1992. In 2003 the research project was given an international perspective covering medium-sized businesses. In 2007, the survey's name was changed from IBOS to the International Business Report (IBR).
Grant Thornton International will donate $5 to UNICEF for every completed IBR questionnaire. In 2008, this will result in a donation of over $39,000.
The research was conducted by Experian Business Strategies Limited.