In the last year, there have been significant changes to nearly every aspect of daily life. It seems no one was unaffected by the COVID pandemic that swept the world. Activities that were once taken for granted have now been limited or, in some cases, are simply gone. From new technologies to accommodate work from home to mask mandates and supply shortages, everything has changed. However, as infection rates go down and businesses open up, the outlook for the next few years is positive.
Business executives were no less affected in the last year and many had to dust off their entrepreneurial spirit to adapt quickly in order to survive. Some were successful and even thrived, others went out of business. Few states saw as big of an impact as Nevada. Because of the state’s dependence on tourism, when that industry falls, it can be catastrophic to the economy. For nearly all of 2020 travel was restricted. And, from mid-March to the beginning of June last year, the iconic Las Vegas Strip was closed for business, an event that was unprecedented prior to the pandemic. Now, as businesses begin to return to pre-pandemic workflows and tourist and convention activity starts to come back to Nevada, executives are optimistic.
“A lot will depend on our government, what we do and how we do it,” explained Gary Patterson, president of Shelby American in southern Nevada. “Nevada business can be very strong, and it was attractive for business to be in Nevada. If we can keep that business climate similar, we’ll be in good shape.”
“I think people adapted very well,” said John Desmond, member and litigation division director of Dickinson Wright. “We actually functioned a lot better remotely than I thought was possible. In terms of lawyer productivity, by June [2020] we were much better than we were in June of 2019, which was a bit of a surprise to me.”
Leaders Weigh In
An annual poll that has been conducted by Nevada Business Magazine for nearly 20 years, the “Power Poll” asks Nevada decision makers for their thoughts on everything from the pandemic to workforce development and social issues. Last year’s poll was sent out in early February 2020, prior to executives having a full picture of what the pandemic would bring. This year’s poll opened nearly a full year after the pandemic shut down the economy. And, while last year’s results were not previously published, they are included here to provide a full picture of executive’s thoughts on these issues. This is not a scientific poll but rather an interesting side-by-side comparison on decision maker responses to various questions over the past few years.
The 2021 poll had a mix of executives responding with the majority (62 percent) identifying as business owners. As it does most years, the poll also mirrors Nevada’s population centers with nearly 70 percent weighing in from southern Nevada. However, there was a higher than usual response from rural Nevada. And, nearly all of the executives that responded to the poll this year indicated they have been doing business in Nevada for 10 years or more.
Economy
Nevada’s economy was in an upswing headed into the pandemic but took a sharp turn down in 2020 and that is reflected in the responses on the poll. In 2020, nearly 80 percent of respondents indicated that Nevada’s economy was better than in 2019. Those numbers flipped in the next year when 84 percent of respondents said that Nevada’s economy was worse than it was going into the pandemic.
When asked to compare their businesses bottom line from 2019 to 2020, the numbers didn’t go down quite as much but still saw a dramatic dip of 32 percent. In 2020, over 70 percent of respondents said that their bottom line was up over 2019. In 2021, that number dropped to 39 percent.
“We were down about 50 percent in the fourth quarter from the previous year,” said Jeffrey Vilkin, founder and president of Tradewinds Construction in southern Nevada. “The shutdown hit us in the fourth quarter and into the first quarter [of this year].”
Even though many organizations saw a loss in income, executives are optimistic that business, and the economy, in Nevada will bounce back in a big way. In fact, only 2 percent of those polled said they expected their bottom line to be worse next year as compared to this year. Only 7 percent felt that Nevada’s economy would be worse next year.
“We are starting to see some businesses rebound,” explained Bob Martin, vice president of the Martin-BenShimon Group at Morgan Stanley in Nevada. “It’s an interesting market in southern Nevada where we are seeing a huge growth in housing. It’s nice to see casinos opening up again, that drives our economy.”
Pandemic
In light of the significant changes brought about by the worldwide pandemic, the 2021 “Power Poll” asked executives how COVID affected their businesses and how they felt local and national leaders responded to the crisis. Sixty-five percent of Nevada businesses were negatively impacted by the pandemic according to executives.
In rating the performance of state and federal government in regard to the pandemic overall, 64 percent of those responding said both the state and federal government handled the response poorly.
“From a state standpoint, it was something like you’re damned if you do and damned if you don’t,” said Martin. “It was definitely inconvenient for a lot of businesses. And, for a state that is driven by tourism and visitors, the lockdowns obviously had a huge negative impact.”
“There was some resistance to some of the closures the governor and his administration imposed but, in the long run, they were beneficial to the state being able to recover more quickly,” added Desmond.
In regard to the federal government, one of the biggest issues executives had with how the pandemic was handled was a lack of response and urgency. “The federal government was a disaster up until the beginning of 2021,” said Helen Lidholm, CEO and managing director of Northern Nevada Medical Center.
Vilkin concurred adding, “You’ve got to be critical of the White House administration’s handling in the early part of the pandemic by essentially ignoring it.”
There were, however, many bright spots in the pandemic and invaluable lessons learned. “In the beginning it was new, stressful and unknown for everybody,” said Lidholm. “We had some of the first cases in the region, so we were tried very early on. Our outcomes have been great throughout.”
Executives also ranked the state and federal government on COVID testing and vaccine rollout, business’ closure and reopening, unemployment and the personal and business stimulus packages. Of those, the state government rated highest in testing, with 41 percent of respondents saying it was handled well. The state ranked worst in unemployment with 82 percent saying it was handled poorly. Nevada leadership also fared poorly in business’ closure and reopening. About 75 percent of respondents said they were handled poorly.
“The testing in Nevada, and particularly Washoe County because that’s my firsthand experience, was handled very well,” said Lidholm. “There was a great deal, and continues to be a great deal, of collaboration among the northern Nevada hospitals and the health department. With the collaboration we have done better than other regions around the country”
At the federal level, executives felt the stimulus, both personal and business, were handled best. Fifty-five percent of executives said the personal stimulus checks were handled well and nearly 70 percent thought the business stimulus, such as the Paycheck Protection Program (PPP) and grants, were handled well.
“My personal opinion is that the relief they passed was necessary,” said Lidholm. “Speaking professionally, when people don’t have an income and can’t pay for their home and food, seeking healthcare drops low on the list.”
“They got it right,” added Vilkin, referencing the PPP loans. “When the bottom dropped out of our revenue stream, we didn’t lay anyone off or take any drastic measures even though we were losing money. That was what the PPP was for and that’s what we used it for. They got it done and they did it fast. You could apply for the PPP on April 3rd and we were funded on April 17th.”
Part of the optimism moving forward for the pandemic is due to the vaccine roll out that began late last year. Many of those interviewed have already received a vaccine. “When I got my shot I was really impressed with how organized and efficient they were. I gave the state good marks for that,” said Martin.
“I did a drive-thru vaccine,” said Desmond. “It was very efficient. I think all over, the state has managed the vaccine we’ve received effectively.”
Healthcare
For certain the industry most impacted by the pandemic was the healthcare industry, which was, in many ways, struggling before the crisis began.
“There are great doctors, and you can get very good healthcare here, but it’s the exception rather than the rule, from my perspective,” said Vilkin.
Patterson agreed, “There are some very good and talented people, but I think the system is overwhelmed in the metro areas because of the growth of the city. And, throughout the country, the cost of medical is astronomical.”
The view of healthcare statewide by executives was relatively unchanged by the pandemic. In both 2020 and 2021, the majority (83 and 84 percent, respectively) said healthcare in Nevada should receive a “C” or less grade. This year, executives were fairly evenly divided in whether access, cost and quality were most concerning.
“I think we still have an issue with access,” said Lidholm. “We still have a lot of people that live in our areas that don’t have health insurance. For me, it’s what I think of first.” When asked about quality and cost specifically, nearly 60 percent were very concerned about quality and 64 percent were very concerned about cost.
Regarding cost, Vilkin said, “It’s been a real concern because prices seem to be a one-way street. It just gets more and more expensive.”
“We can certainly be doing better and there are many areas we can improve,” said Desmond. “In going through a pandemic, when you look at the response the state had and how healthcare workers stepped up, it’s really been impressive. There were times over the last year where our system was being tested and I think it responded well. We’re fortunate to have the healthcare providers that we have in Nevada and they really stepped up.”
Education and Workforce
If healthcare was hit hardest by the pandemic, education may have been the industry to see the most changes. Schools shut down and educators and parents had to quickly find a way to keep kids learning and engaged without the aid of a classroom.
“I think of the poor parents that were working from home,” said Martin. “They had jobs to get done and they also had kids at home. They were trying to hook them up to calls for school and make sure they’re listening. I feel like it’s been kind of a wash year from an education standpoint because even the most adept people [struggled].”
However, much like healthcare, education ranked poorly among executives going into the pandemic. In 2020, 60 percent said education should receive a “D” or below grade in Nevada. In 2021, that number rose to 70 percent. When asked what would best help fix education in Nevada, accountability ranked highest with over 50 percent indicating it would be an important focus.
“There are good people in [the K-12 system], but the good is really limited by a system that needs to be restructured so the money they have produces a better result,” said Vilkin. “That’s way easier to say than to do. I’m not raising my hand to be the one to volunteer for it,” he added.
When asked how to fix education Patterson said a return to the basics could help, “I would start with the teachers from the very beginning and go back to teaching core values. The students have to have ownership and be held accountable. All the things that make a good business successful, we should do in schools.”
Moving forward, education will continue to be a vital issue for Nevada because of the workforce challenges the state faces. An overwhelming 95 percent of executives agreed that workforce development is a critical issue for Nevada. In addition, 80 percent said finding qualified employees was the biggest workforce challenge.
“It starts with colleges and universities throughout our state,” said Lidholm.
Desmond agreed and added that having schools’ partner with business to create partnership programs is an important piece of the puzzle.
“Having programs where we’re working hand-in-hand with employers and providing the type of skilled workforce employers need is critical,” he said. “The more we can develop and expand the workforce the better off we are going to be in terms of competing for those types of companies relocating here.”
Now Hiring
Staffing is directly affected by workforce challenges and both new-to-Nevada businesses and those that have been here for decades have been having staffing issues over the past few years. In 2020, over 50 percent of executives increased staff and over 60 percent were expecting to continue expanding. This year, the number of executives that hired dropped to 33 percent but over 50 percent expect to hire in the next 12 months.
“It’s a difficult environment,” said Desmond. “The number of skilled workers is less than the available positions. We have found that it’s a much more competitive environment and, oftentimes, you have to provide incentives to differentiate yourself from other potential employers.”
“It’s an ongoing effort,” said Martin. “We continue to hire people and that will only pick up as the year goes on.”
Lidholm has seen challenges specific to healthcare because of the lack of talent as well as the pandemic which brought about a shift in healthcare workers. “We’ve seen a change in healthcare staffing during the pandemic. We’ve had some people leaving the healthcare profession and it’s a challenge to keep up with changes. We’re a small region, we don’t have a large metropolitan area to draw staff from,” she explained.
Unions continue to be in the spotlight in 2021 with over 70 percent of those polled feeling that they no longer have a place in the workforce. However, that covers a broad range of unions and not all executives felt they no longer had a place.
“When you look at the overall quality of life and benefits for employees in service sectors, unions have been pretty vital to that, particularly in the gaming, tourism and hospitality arenas,” said Desmond. “It is something that attracts workers to Nevada. And unions, for the most part, do a good job looking out for the health and well-being of their members.”
Tax Concerns
While employment challenges are ongoing, taxes too remain high on the list of concerns for business executives. Nearly 60 percent felt that businesses in Nevada have too much of a tax burden. However, 92 percent of those indicated that Nevada is still a business-friendly state.
“Sales tax here in Nevada is definitely higher than a lot of states,” said Patterson. “But if you do look at states that have a more favorable sales tax, a lot of those have a state income tax. One way or another, you’re paying. You just pay different.”
A state income tax continues to be unfavorable for executives. In the last four years, over 90 percent of executives consistently said they would not support one if it were introduced. In Nevada, mining and gaming companies both have industry specific taxes and the legislature often looks to both industries to fill funding gaps. However, executives generally agree that gaming (73 percent) and mining (58 percent) are both paying a fair share of taxes.
“[Gaming] has always paid their fair share, how much more can you take from them?” asked Vilkin. He added, “I’m not a believer that you should expect businesses who are successful and growing to pay more because they grew.”
Lets Talk Politics
Few years in history have brought as many political and social issues to the forefront as the past year. From the pandemic to the election, it’s hard to even remember all of the significant events that happened last year. And, in many ways, the world as we know it, and Nevada in particular, has changed. At the federal level, there is a new president in the White House and an entirely new set of leaders at the helm.
When asked how to grade President Trump’s performance while he was in office and how President Biden is doing so far, Trump was given a grade of “B+” with Biden receiving a “C+”.
Governor Sisolak went down from a “B-” to a “C+” over the past year, likely due to the pandemic.
“He’s had to make a lot of hard choices in the face of a lot of criticism from different constituencies,” said Desmond.
Apart from a new president, there weren’t a lot of changes in leadership in Nevada and most elected officials received similar marks to previous years. Representative Susie Lee has had the most improvement, moving from a grade of “C+” up to a “B-”. And, among the mayors of Nevada’s largest municipalities, Mayor John Lee of North Las Vegas did best with a grade of “A-”.
Concerns: Local and Social
Locally in Nevada, a lot of issues that concern business owners year to year were put on the back burner while the pandemic moved to the forefront executives continue to be most concerned about the availability and cost of healthcare and the quality of education.
“The cost of healthcare is continuing to spiral out of control,” said Desmond. “It has such an impact on people’s lives and transcends a number of different demographic groups. We need to continue to improve our system.”
One issue that wasn’t listed on the poll but has become a growing concern on both ends of the state is the housing shortage. As people flood to Nevada from nearby states, there has been a dearth of available housing in both Washoe and Clark Counties.
“We’re facing a bit of a housing crisis which is an issue that is not going to go away,” said Desmond. “I just saw that Reno made the list of least affordable places to live in the country. We have a median housing price at almost $450,000. With an average salary in Reno, it would take 41 percent of your salary to be able to purchase a home. Las Vegas was on the list as well.”
Nationwide and locally in 2020, social issues were brought into sharp focus. Likely a result of the contentious election and new voting mechanisms, voter issues became a topic of debate. The argument over whether ID should be required to vote has been front and center this year. Over 80 percent of executives in the last two years looked favorably on voter ID, although the number was slightly less in 2021.
“No one has convinced me it’s a bad thing,” said Martin. “I know people think that it will decrease voter turnout.”
Lidholm held a different opinion. She said, “I think we should let society do more to make sure everybody gets an opportunity to vote.”
When asked what social issue they were most concerned with, executives rated the pandemic as most concerning. However, government overreach was a close second with 43 percent rating it in the first and second levels of concern. In regard to other social issues, executives felt strongly about term limits. A whopping 86 percent indicated that all elected officials should be restricted in their terms.
“It’s good to have somebody new,” said Patterson. “If you want the job done, find someone that has been really good and successful running a business, those are the people you want doing the job. You want someone that’s gotten positive results.”
He added, “Leadership needs to know there is a lot that is really concerning [to business executives. They need to make decisions that are pro-business or businesses, and people, are going to leave.”
