Business Up Front - May 2007

Business Up Front

Business Leaders Struggle to Find Good Talent

Many of today’s top CEOs describe the quest to find quality talent like searching for a needle in a haystack. Recruiting and training staff is such a plight for businesses that they recently selected it as the No. 1 challenge in today’s workplace, according to the 2007 Management Action Programs (MAP) Quarterly CEO Survey. Despite feeling confident in their companies’ future performance and growth, more than 20 percent of the executives report that hiring talented employees is their biggest business-development roadblock. Some say it’s because the best employees already work for someone else. But others fall prey to reactive, rather than proactive, recruitment tactics, leaving them scrambling to find great hires. The survey unveiled that CEOs stay current with world events and are wary regarding how those events affect business. Top concerns are:

• Recently weaker residential housing market

• Rising interest rates

• Iraq war and uneasiness surrounding terrorism and homeland security

CEOs planning for business growth feel external factors will not greatly impact their ability to achieve their goals.

Younger Americans Planning for Retirement

According to the 2007 American Retirement Study by Scottrade, 89 percent of 18- to 24-year-olds plan to save for retirement in 2007. Young people are just as concerned as their older counterparts about having enough money for retirement and a surprising number are planning for their retirement on their own without the help of a financial professional to do it. Nearly 40 percent of 18-to 24-year-olds and 60 percent of 25- to 34-year-olds are concerned about having enough money for retirement. Of this younger set, 36 percent of 18- to 24-year-olds and 49 percent of 25- to 34-year-olds are actively planning on their own without the help of a professional financial advisor. Younger Americans are focused on opening an IRA that has “no fees” attached to it. Sixty-two percent of adults under age 35 said a no-fee IRA was very or extremely important. Both twenty- and thirty-somethings are much more apt to do their own financial planning online.

State and Local Business Taxes Jump 10 percent in Fiscal 2006

Businesses paid $554 billion in state and local taxes in fiscal year 2006, representing 45 percent of total taxes collected by all state and local governments, according the annual study prepared by Ernst & Young LLP in conjuction with the Council On State Taxation (COST). The share of taxes paid is determined by a state’s overall tax system, the structure of its economy, the types of business taxes levied, as well as business tax features that may provide a competitive advantage or disadvantage in attracting and retaining business employment and investment. Key findings of the study include:

• State and local business taxes totalled $554 billion in FY2006, up 10.2 percent for the prior year.

• Property taxes were the largest state and local business tax, accounting for $205 billion in 2006, representing 37 percent of total state and local business taxes.

• Sales taxes on business inputs were the second largest state and local business, accounting for $125 billion in 2006, or 23 percent of total state and local business taxes.

• Corporate income tax totalled $52 billion in 2006, representing only 9 percent of total state and local taxes.