Hispanics make up 18.1% of the US population with close to 60 million people. More and more Hispanic entrepreneurs serve 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 led to exceptional growth, exceeding the expectations of owners when they started their venture.
Still a tight labor market makes it much harder to find the right talent and keep 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 businesses with between 2 and 99 employees generate revenue between $100,000 and $4,999,999.
The study then compared the results of the survey to national benchmark standards for size, revenue and region. The study also determined 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 will increase. And 51% plan on hiring new workers. Enter challenges as the labor market continues to tighten.
In 2018, all businesses experienced challenges finding qualified talent. But 58% of Hispanic entrepreneurs experienced these challenges. They also report it harder to find talent and retain it.
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 at 45%.
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 to standing a chance in this ultra-competitive job market. In the report, 75% of Hispanic owners are making these adjustments, compared to 55% of other business owners.
Hispanic owners are using social media more 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.