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8/14/05

Ownership
Business creation up for women, minorities

The number of businesses begun by women and minorities in the United States between 1997 and 2002 exceeded the national average, according to the Census Bureau.

The government found that the rate of growth for minority and women-owned firms ranged from 67 percent for native Hawaiian and other Pacific Islanders to 20 percent for women. By contrast, business creation for the general population increased by 10 percent.

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In all, 23 million firms were created during those years, the government said. Overall, those businesses increased their receipts by 22 percent over the five-year period and totaled $22.6 trillion. Black-owned firms increased their receipts by 30 percent and white-owned firms posted a 5 percent increase.

According to the census, there were 6.5 million women-owned businesses in 2002, up 20 percent from 1997. Those companies' total sales were up 20 percent and were valued at $950.6 billion — a 16 percent increase since 1997.

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The government said there were 917,946 women-owned firms with paid employees, up 8 percent over 1997. By contrast, more women put up a shingle and became self-employed but did not hire workers. Those companies numbered 5.6 million. They've grown 22 percent since 1997.

Most of the companies started by women were in the service sector and included industries like healthcare, professional services, real estate or finance.

In all, there were 1.6 million businesses owned by Latinos in 2002, up 31 percent from 1997. Sales, which totaled $226.5 billion, were up 22 percent over five years ago. Federal researchers said most — about 1.4 million — had no paid employees. They earned a total of $42.5 billion, up 54 percent over 1997.

According to the government, many of those companies were in administration and support, or waste management, healthcare or construction.

Black-owned businesses, which totaled 1.2 million in 2002, rose 45 percent and had $92.7 billion in sales. Many — about 1.1 million — had no paid workers. Those companies were up 51 percent over 1997, and earned $22.9 billion in 2002, an increase of 54 percent over 1997. Black-owned companies with paid workers earned a total of $69.8 billion.

The Census Bureau found that 38 percent of the black-owned companies were in healthcare, retail trade, or other service industries.

There were 1.1 million Asian-owned businesses in 2002, up 24 percent from 1997. Their receipts were $343.3 billion, up 13 percent from 1997. Approximately 319,911 of those companies had paid workers, with sales of about $307.6 billion.

Asian companies without workers have increased 30 percent since 1997, earning $35.8 billion, or 27 percent more than they earned in 1997.

COMPENSATION
Shortage, competition boost pharmacists' pay

Pharmacists are seeing an increase in their paychecks.

The 2005 Pharmacy Compensation Survey reveals that pharmacists' median pay is now $93,000, up from $88,000 last year. The 5.5 percent increased is due to an ongoing shortage of pharmacy professionals, the growth of retail pharmacies aggressively competing with hospitals and medical centers for pharmacists, and the pending retirements of baby boomers and the fact that there will not be enough younger pharmacists to replace them.

''Basically, there are too many jobs for too few pharmacists and pharmacy operators are paying competitively to fill open positions,'' said Eric Michael, a senior consultant with Mercer's Managed Pharmacy Benefit division.

CHANGING ROLES
Information chiefs wield more influence

Chief information officers, whose work was once limited to the control of technology, have a lot more influence these days.

A new study reveals that CIOs have far more financial responsibility than they had in the past, with 97 percent of 292 technology executives polled saying they now have a direct impact on corporate finances and earnings. In addition, 73 percent said their role and level of influence has increased in recent years.

Bill Deam, executive vice president and chief information officer of the contract research firm Quintiles Transnational said, ''My role has shifted dramatically over the past three years. Today, I have oversight and responsibility for identifying new growth opportunities and work.''

The study was commissioned by the CIO Executive Council.

When asked how their roles had changed, 49 percent said they felt they had greater influence among top executives than they had before. They also said their jobs had been expanded to include management of business processes or functions that have nothing to do with information technology.

One other factor: Most of these executives are not bound to the United States or have jobs that require they work abroad at times with different divisions and with a variety of employees or customers.

Mark Hall, general manager of the council, attributed the expanded role of information chiefs to several factors, including regulatory measures like the Sarbanes-Oxley Act. He said increased concerns about the possibility of security breaches and the theft of intellectual property have also played a key role in expanding the role.

''When you combine these new responsibilities with the increasing globalization of our marketplace, it is more evident than ever that CIOs need an international network of peers to work together, share information, and continue to raise the status of their profession,'' Hall said.

When asked whether any of their IT functions are being done abroad through offshore outsourcing, however, 52 percent said none of their work is being outsourced. One percent said more than 75 percent of their work is done abroad, 3 percent said 50 to 75 percent of their work, 6 percent said up to 49 percent of the work has been shipped abroad, and 39 percent said 1 to 24 percent of the information technology work they supervise is now done offshore.

The companies were also asked how much their information technology departments have spent trying to comply with the provisions of Sarbanes-Oxley.

Thirty six percent of the information chiefs said their departments had spent between $100,000 and $499,000 over the past 12 months in an effort to comply with the law.

CONGRESS
Pension solvency amendment faces fight

The Senate Finance Committee agreed last week to an amendment by Massachusetts Senator John Kerry that would hold chief executives and other officials responsible for ensuring that their company-sponsored pension plans for workers are solvent. The amendment must be approved by the entire Senate and faces a stiff battle in Congress, however. Some Republicans feel it is too stringent.

Under the amendment, retirement benefits and golden parachutes for executives that are often valued in the millions of dollars would be tied to the funding of their workers' pension plans.

The amendment says the executives' retirement funds would be reduced if funding of the workers' retirement plan drops. In other words, workers pension funds must be 80 percent funded.

''It's time Washington understood that a worker's pension is just as important as a CEO's golden parachute,'' said Kerry, a Democrat.

''We've seen what can happen when corporations cook the books, and we need to hold CEOs accountable for actually paying the pensions they've promised their employees,'' he added.

Diane E. Lewis can be reached at .

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