Guest commentary: Three trends that will shape business in 2024
By Jason Bietz
Last year was a dynamic year for businesses across all sectors in the Tri-Counites, including tourism, hospitality, aerospace, renewable energy and Ag tech.
Artificial intelligence (AI) went from a novel technology to a more widely utilized business productivity tool, companies continued to invest in sustainable business practices, and digital business solutions helped companies thrive.
We also saw more venture capital investment along the Central Coast with $54.6 million invested in 2023 alone.
As the new year gets underway, here are a few predictions for what current and emerging trends will further shape Central Coast mid-size businesses in 2024.
Digital tools will continue to unlock operational efficiencies
Businesses of all sizes and sectors are embracing digital innovation to automate tasks and streamline processes.
This is true for Central Coast businesses as well, as we continue to advise our mid-size business clients about adopting the latest digital technology into their daily operations that build greater efficiencies around payment processing, tracking invoices and managing cash flow that together can help their bottom line.
The new year can serve as a good time for business owners to review their operations — and industry best practices — to identify how digital tools can help them expertly manage various aspects of their businesses.
The Bank of America Mid-Sized Business Owner Report found that more businesses plan to invest in new technologies, and utilize more automation and AI tools during the year ahead, and when asked how they plan to use these tools, owners listed reasons such as assisting with hiring (45%) and streamlining payroll and bookkeeping (42%).
Businesses also expect to use more digital payments in 2024, with 76 percent of owners anticipating all their transactions becoming digital at some point.
A confluence of trends and benefits have helped digital payments proliferate — including widespread smartphone adoption and the growth of cloud-based software solutions, as well as increased digital transaction speeds and the additional security through encryption and tokenization.
Labor markets are beginning to shift
The wave of resignations seen over the past few years has slowed, and according to the Bank of America 2023 Workplace Benefits Report, nearly 70% of employees plan to stay with their current companies in 2024.
As more businesses invest in digital tools and AI, they must prepare workers to use these tools properly through upskilling.
Bridging the gap between a tool’s potential and company readiness will require training, and providing that training can help boost employee attraction and retention.
Despite this, labor shortages continue to challenge business owners.
The Central Coast, for example, continues to have challenges attracting and retaining both skilled and unskilled labor as employers try to balance pay with the region’s high cost of living.
There is a growing effort in the business community to work with local government agencies, colleges and universities to find solutions.
This year, we expect mobility between industries to continue as businesses hire more for skills than traditional industry experience or even education.
A McKinsey & Co. report notes that hiring for skill is five times more predictive of on-the-job performance than hiring for education, and this practice also widens the potential talent pool.
Savvy business leaders will continue in their efforts to meet existing and prospective employee expectations in 2024.
Our Workplace Benefits Report found that over half of employers currently have in-person work models, but workers continue to value flexibility.
Remote work isn’t a good fit for all businesses, but those supporting it in full or part may benefit from greater worker satisfaction and retention.
Strategic partners can help navigate uncertainty
This year is a general election year, and with the U.S. presidential election and other global elections, we can expect to see market volatility. Further economic uncertainty will be fueled by mixed views about the likelihood of a recession and when interest rates will decrease.
Fortunately, the stock market tends to restabilize after elections, regardless of which party is in power. Business owners should be prepared to steer their companies and employees through these uncertain times, and one of the best ways to do that is by leveraging the expertise and tools of their strategic partners, including bankers, financial advisors, lawyers and accountants.
It’s one thing to monitor trends, but business leaders must adapt now to remain at the forefront later. By embracing these changes and investing in new strategies and technologies to support your business objectives, companies can position themselves for success in 2024 and beyond.
As the nation’s top business lender that has served the Central Coast for more than 100 years, Bank of America is proud to offer these steps that can help put your business on the path to a strong and successful new year.
Jason Bietz is a Senior Vice President and Relationship Manager for the San Luis Obispo market in Commercial Banking at Bank of America.
