The primary concern of business leaders in Colorado has shifted from a lack of workers to an excess of regulations, a new poll found. 

Of 156 business leaders from across the state, 48% identified regulations as their most important issue, according to the Colorado Chamber of Commerce’s 2023 Business Leaders Survey released on Wednesday.

Last year, only 26% of business leaders said regulations topped their concerns, second to the 27% who said worker shortages. This year, only 11% cited worker shortages. 

When ranking regulations, 73% of business leaders said labor and employment requirements, such as paid leave, are among the most burdensome. That’s followed by environmental regulations with 46% and new regulatory fees with 40%. And 64% of business leaders said the greatest regulatory burdens come from the state, rather than federal and local governments. 

Pat McFerron, president of the Cole Hargrave Snodgrass and Associates firm, which conducted the poll, said he’s surveyed around a dozen other states and they all still have workforce shortages as their top issue. 

“This is the greatest concern about the regulatory climate that I’ve ever recorded,” McFerron said. “I don’t often see these striking of numbers because companies leave states when they have this kind of sense.” 

The specific regulations business leaders said are the most costly are relatively new.

The Colorado Family and Medical Leave Insurance program, approved by voters in November 2020, topped the list with 57% calling it the top two costliest. Paid sick leave mandates and wage transparency rules are nearly tied at 27% and 26%, respectively. The legislature passed a law requiring employers to provide paid sick leave in 2020, expanding the eligible uses of sick leave in August, and approved the wage transparency law in 2019.

“Lawmakers need to understand that every new regulatory burden coming from the Capitol has a real impact on jobs and economic growth,” said Colorado Chamber President and CEO Loren Furman. 

Overall, Colorado business leaders are less optimistic this year than in the 2022 poll.

Six in 10 respondents said Colorado’s economy is “on the wrong track,” compared to 53% last year. While 83% maintained or increased their workforce in the past year – up from 78% in 2022 – fewer business leaders expect to increase their workforce in the upcoming year: 41% this year versus 48% last year. 

Nearly half of business leaders, 48%, said they have open positions that are difficult to fill, but that’s down from 66% in 2022. When it comes to workforce, the top concerns are a lack of soft skills and technical skills. The greatest barriers for attracting and retaining talent are the cost of living and housing attainability, the poll said.  

Only 15% of business leaders said they have “no hesitancy” in continuing to invest in Colorado, with the top reason for hesitancy being regulatory costs. Business leaders in the manufacturing industry and large employers expressed the most hesitancy. Nearly two-thirds of business leaders, 63%, said Colorado’s business climate is more costly than other states, and 46% said at least some of their future investments will be made out of state. 

“That should really be a wake up call,” McFerron said. “Colorado is at risk of people leaving the state because of the regulatory environment. That would be the top issue and concern here.” 

McFerron presented the poll results on Wednesday in a briefing with state legislators, staff and reporters. Legislators present at the briefing included Sens. Joann Ginal, Mark Baisley, Chris Kolker and Paul Lundeen, and Reps. Judy Amabile, Ron Weinberg, Bob Marshall and Don Wilson. 

Furman said the chamber will use the poll results to help shape their policy priorities during the 2024 legislative session, and long-term goals for a plan the chamber intends to launch in October. 

Besides just addressing the concerns around business regulations, the poll could lead the chamber to advocate for a variety of policy proposals. Of business leaders, 86% support efforts to improve housing affordability and availability, and 79% support incentives for students to meet workforce needs. 

“We need to start addressing some of these concerns. We can’t be complacent,” Furman said. “Otherwise, we’re going to continue to lose our competitiveness and our businesses are going to continue to consider other states.”