Sunday, October 03, 1999
GREATER CINCINNATI 100
Privately owned businesses face Y2K challenges
BY JERRY REICHERT
Special to The Cincinnati Enquirer
As the new century approaches, privately owned businesses face transitional challenges as never before.
Commitment, hard work and planning will be essential for ensuring the success and longevity of privately owned enterprises. Their ability to succeed in making the transition is critical, not only to the families owning the businesses, but to their communities and the entire U.S. economy.
Members of this year's Greater Cincinnati 100 are no exception. Survey results from these companies, with revenues ranging from $36 million to $600 million, provide important insights into the issues and concerns faced by privately owned businesses operating in the Greater Cincinnati area.
This year's survey focused on topics ranging from the economic outlook and growth strategies to the much-publicized Y2K issue. By gathering this data, small and midsized companies are provided with information and analysis to use in charting their progress in expanding and managing their businesses.
Looking at this year's results, some prevailing themes emerged from the survey:
• 74 percent of Greater Cincinnati area companies cite the lack of qualified workers as the most significant challenge to the growth and survival of their business.
• 54 percent of the respondents cited motivating and retaining employees as one of the top three challenges facing their business. To that end, 76 percent expect employee compensation to increase up to 10 percent in the next 12 months.
• Companies are going to great lengths to attract and retain good employees. Fifty-eight percent of the respondents offer bonus plans, either discretionary, tied to individual performance, tied to company performance or some combination .
• Almost one-third of the Greater Cincinnati 100 companies offer some type of flexible work arrangement to their employees.
• 40 percent of respondents indicated that they have changed the ways they attract new employees. More companies are using professional recruiters, job fairs and the Internet to attract employees.
Technology continues to receive a great deal of focus from the 100 companies. Although 73 percent of the respondents think their organizations are keeping pace, 80 percent plan to spend up to 5 percent or more of their revenues on technology in the next 12 months.
And what survey of technology would be complete without mentioning the Y2K issue — particularly because the big day is less than 100 days away?
Seventy percent of the companies have upgraded systems, and 72 percent have bought Y2K-compliant software. In addition, 53 percent of the respondents have contacted their major suppliers and vendors to ascertain supplier/vendor Y2K compliance. It is important to note that 62 percent of the Greater Cincinnati 100 companies have already tested their year 2000 compliance.
The survey also indicates that all 100 companies realize the importance of a satisfied customer. Seventy-seven percent of the companies surveyed regularly monitor customer satisfaction through face-to-face interviews, phone interviews and annual written surveys.
In terms of growth strategies, more than 50 percent of the companies expect to grow through acquisitions in the next 18 months, 42 percent cited strategic alliances, and 38 percent plan to grow through the Internet. It is interesting that none of the respondents cited a public offering as a growth strategy.
What does all of this tell us?
The 100 largest privately held companies in our area are focused on attracting, motivating and retaining qualified workers. They are committed to keeping up with technology. They are continuously looking for new and better ways to serve customers and increase productivity.
And, seven out of 10 respondents anticipate continued economic expansion for the remainder of 1999 and the first half of 2000.
Jerry Reichert is partner in charge of Arthur Andersen's Enterprise Group, which serves small to midsized companies in Greater Cincinnati and is responsible for the annual Greater Cincinnati 100.
Top private firms show the will to grow
Execs bullish on outlook for area's economy
Notable locals investing in R&D and technology
Signs of softening economy showing
Skilled, loyal employees are precious commodities
Traffic woes creep into gripes
How the list is put together
Ris Paper Co. No. 1 for 3rd year in row
List has room for 11 newcomers
10 companies come close to mark, but lag in revenue pace
Privately owned businesses face Y2K challenges
New device keeps mileage for IRS
Employers can guard against suits
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