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Economic Trends Survey Leads to Increased Press
by Mary Lynn Fayoumi, CAE, SPHR, GPHR, President & CEO
Published March 11, 2010
The Management Association has a long history and a strong reputation for producing reliable benchmarking surveys. Although most are geared specifically for our member organizations, some of the data we gather and analyze is of great interest to the business community and general public. In particular, our quarterly surveys of employer responses to the economy have attracted increased attention by the local press. Publications including Crain’s Chicago Business and the Chicago Sun-Times have interviewed our staff and members due to their expert opinions and experiences on this timely topic. In the article reprinted below, staff member Lisa Callaway is featured along with member organizations, HS Crocker and GKI Incorporated. If you have not run across any of the articles in which we have been quoted, keep your eyes open – there will be more to come.
Firms report worst is past
By CHRIS FREEMAN
Business Journal McHenry County
Published March 7, 2010
Mixed economic reports come out every day, with some touting better retail sales or increased factory orders, and others showing continuing cutbacks in employment or fewer homes under contract.
But a survey released last week by The Management Association appears to paint a picture of optimism around Chicago.
The group, which has a membership of about 1,000 business, most of whom are in Chicago and the collar counties, said its Chicago Area Economic Conditions Survey of Employer Practices and Plans for 2010 showed a majority of companies reporting that the worst of the recession is over.
Nearly half of the survey respondents said they thought the economy was getting better, and 61 percent expected their performance to be better in 2010 than it was in 2009 – the most positive results since the group began the quarterly surveys in December 2008.
“I think that’s really significant,” said Lisa Callaway, vice president and general counsel for The Management Association. “If we asked that in the same time period in 2009, I think we would have gotten a very different response.”
Among the other notable results, a majority of the more than 200 companies who responded said they did not expect to cut hours, pay or retirement plan contributions this year.
“What that means is that in the last measurable period, employers have started to see a more positive reflection on the bottom line,” Callaway said specifically of the halt to retirement benefit cuts. “I thought that specific question was a real positive response.
“You recall in 2008 when the market was having a real tough time, I thought that [retirement-plan] reduction took into account a couple of different things. Companies could save money by not putting in, and when the market was not doing real well, that made the decision easier. Now that the market’s a little strong and having higher returns, I think employers are wanting to go back and say reimpose that match that we suspended.”
A total of 31 percent said they were likely to give raises this year, and 23 percent expected to hire new employees or call back workers from layoffs.
One of those companies planning raises is HS Crocker in Huntley. The company makes lids for private label and name brand yogurt companies, and although Chief Executive Officer Ron Giordano said that there had been tough times, the company has seen signs of recovery.
“Through January it was still kinda slow but we’re seeing signs in February and March of picking up a little bit,” he said.
The company cut down production from three shifts to two in late 2007 and 2008, when its slow period began. That meant layoffs across the board, Giordano said, including in the front office. To keep the company from further rounds of cutbacks, it froze bonuses and salaries company-wide in 2009.
“We still have no bonuses this year, and management has been frozen again, but the employees will get a minimal increase this year,” he said. “I’m frozen, too, for the second year. You have to take the lead, I think. If you’re not willing to sacrifice yourself, how are you going to ask anyone else to sacrifice?”
The same kind of scenario has played out at GKI Incorporated in Crystal Lake, which repairs, sells, designs and build tools for a variety of different industries.
When the economy turned, the company tried to stave off layoffs with cuts to salaries and benefits, but still was forced to lay off 37 percent of its work force, said Jackie Jesse, administrative manager at GKI.
“It was very sad,” Jesse said. “GKI is a small family owned business. We don’t have employees, we have members. Our average tenure here is 18 1/2 years. We don’t have turnover here. It was extremely hard for us.”
But like other businesses, Jesse said GKI has been seeing things slowly get better. And that means familiar faces are returning to the company.
“To see these people return, they’re so happy to be here,” she said. “Normally you get up and go to work, but now they’re excited to be here, and we’re excited, and it’s a good thing. It’s unfortunate it took this economy to do it, but I have every strong faith that this has made us stronger.”
McHenry County Economic Development Corp. President Pam Cumpata said she heard upbeat outlooks from area companies similar to HS Crocker and GKI.
“The companies and the owners I’m seeing, they’re busy. The volumes are up,” she said. “They’re still concerned about health care being still out there, and cap-and-trade they still feel needs to be addressed. But they believe that they have their employee base where it needs to be.”
Among the good signs, Cumpata said, were discussions she had with representatives from staffing companies such as Express Employment Pros and Manpower.
“They’re seeing companies address their needs to get through with temp agencies,” she said. “They’re seeing they need to pick up work and business is picking up and they’re taking that first step. It’s a careful step, but that’s good.”
Click here to view the full article online.
