PACIFIC SEGMENT HEAD, MIDDLE MARKET BANKING AND SPECIALIZED INDUSTRIES
2023 is upon us and so is the time for New Year’s resolutions. While many of us make personal resolutions, it’s also a great opportunity to assess your business’ short and long term goals. Now is the time to consider making strategic adjustments if you’ve veered slightly off track or set new goals if you’ve successfully hit your previous metrics. While there’s never one set path to achieving business growth, here are three key areas for L.A.’s business leaders to assess as we head into the New Year:
1. EVALUATE YOUR LABOR NEEDS
In 2022, we saw labor issues intensify with the majority of business leaders (70%) citing it as a top challenge in the latest JPMorgan Chase Business Leaders Outlook Pulse survey. Companies have struggled to find new talent and many have made adjustments to wages and boosted employee benefits to encourage retention. With the highly publicized layoffs affecting the local tech and media industries across California, the labor market continues to be top of mind.
And yet, despite these recent events, low unemployment and elevated wages could remain a staple in the nearterm as excess demand for workers coupled with cross industry growth continues to work its way through the post-pandemic economy according to J.P. Morgan Asset Management.
Given this unusual economic cycle, business leaders should take this time to assess their needs and focus on employee retention. This could mean raising wages or offering flexible hours. Another option is to offer upskilling and training to help meet needs while hiring remains challenging.
Now is the time to consider making strategic adjustments if you’ve veered slightly off track or set new goals if you’ve successfully hit your previous metrics.
2. TAKE A TECH-FORWARD APPROACH
While we’re not all in the tech industry, how you use today’s innovations to achieve efficiencies and improve the experience for both employees and customers will continue to pay dividends in the New Year. When screening for candidates to join my team, I look for bankers who have tech fluencies in their skillset so that they can help our clients navigate the latest technology available to upgrade their business operations.
During the pandemic many businesses overhauled their systems to embrace digital payments. What was at first temporary fixes to digitize paper invoices and payments are now critical components of a long-term payments strategy that can reduce friction and increase efficiencies.
Similarly, consider incentivizing vendor adoption of electronic payment methods, such as card and ACH, to create even more efficiencies and minimize the risk of fraud. Work with your bank to implement a holistic payables solution, incorporating various electronic payment methods. Investing now in treasury processes will pay off in the long run.
3. BE READY TO TAKE ADVANTAGE OF OPPORTUNITY
While navigating near-term challenges like ongoing supply chain and labor issues, it can be easy to lose sight of the big picture. However, a softer economy can provide an opening to build or expand for businesses that are well-positioned to take the next step in their growth.
While it is valuable to consider growth opportunities through product innovation or other tactics, don’t forget to look outwards. Even in an uncertain economic environment, a strategic merger or acquisition opportunity that wouldn’t otherwise be available could present itself and you wouldn’t want to miss out.
Looking to 2023, L.A.’s companies can continue on the path towards growth if they thoughtfully manage their labor needs, lean into innovation and keep an eye on future M&A opportunities.
Tony Sciarrino is the Pacific Segment Head for Middle Market Banking and Specialized Industries at JPMorgan Chase.