Would you like to sign in?
|
Share this page: |
|
Economic Outlook of Employers Continues to Improve - The Management Association of Illinois
About Us
Economic Outlook of Employers Continues to Improve
by Mary Lynn Fayoumi, CAE, SPHR, GPHR, President & CEO
Published Feb 11, 2010
Results of a just released survey conducted by The Management Association of Illinois indicate that 2010 is going to be significantly easier than 2009 in terms of tough decisions impacting employees. In a series of quarterly economic trend surveys which began in December 2008, the current edition contains the most optimistic data yet. With over 200 participating employers submitting data, 46% feel that the economy is getting better and 61% expect 2010 performance to be better than last year. (Members can access the full survey report here.)
The previous four surveys all showed that organizations were taking a variety of actions to reduce expenses and remain viable. From freezing salaries and hiring, to implementing reduced workweeks or furloughs, employers were forced to decide how best to handle the myriad challenges posed by the recession. Some endeavored to avoid mass layoffs by reducing benefit expenses, including 401(k) match suspensions, heath care contribution increases and executive perk eliminations. Other employers had no choice but to cut staff in addition to asking current employees to take pay cuts and work indefinitely in a lean environment.
Fortunately, morale appears to be holding its own in the majority of organizations. Fifty-six percent of participating employers reported that there had been no change in morale due to the recession, 16% reported that their morale was higher than ever and only 29% admitted that their morale was lower than ever. Given other reports on the current state of doom caused by high unemployment and limited job growth, these statistics are heartening. In fact, it may be evidence that organizations are working harder than ever to boost morale during these tough times and make a concerted effort to take care of their current workforce.
Based on the survey data, the jobless recovery that has been so dominant in the news seems to be verified. Sixty-two percent of employers expect their employment size to remain at current levels and only 17% are planning to increase the size of their workforce an average of 6.8%. Five percent of organizations will continue their hiring freeze and 12% will either reduce headcount through layoff or attrition. On a positive note, 6% are planning to call back employees from lay-off and 15% are planning to utilize more temporary employees than in 2009.
In terms of other plans for 2010, very few employers are expecting to have to implement new restricted policies or additional pay or benefit cuts. To the contrary, the majority are in somewhat of a holding pattern based on 2009 business levels. Those who are beginning to reinstate pay, bonuses or benefits are still cautious with few reporting plans in the near future to get back to pre-recession levels. For example, 25% of employers do plan to increase base compensation, but only 6% are planning to restore pay to previous rates. Additionally, 22% are increasing staff training, but another 65% are holding training at the same level as 2009.
In summary, this year looks much brighter for employers when it comes to employment policies and practices. Downsizing, short workweeks, and reduced pay will be less likely for those still gainfully employed. However, employers are not willing to risk excessive hiring or unnecessary spending anytime soon. Many are still restricting hiring to critical positions and are requiring department heads to justify every requested addition to the workforce. The data also shows that for many employers the future is still unclear and therefore, decisions are being deferred until business conditions are consistently stronger.
The Association will continue to monitor these critical issues and analyze the data so that employers can benchmark their actions against other Chicagoland employers. As in previous surveys, that demographic mix of participants is diverse. Just under half of the participating organizations are in manufacturing, 33% in the service sector and 21% are non-profits. Again in this survey, half of the employers have less than 100 employees and the other half employ over 100.
