Employers Optimism Tempered by Talent, Economic and Regulatory Challenges
By Mary Lynn Fayoumi, CAE, SPHR, GPHR, President & CEO
Published December 5, 2017
While 2017 was a strong year for business, executives continue to express concerns about the challenges they face going into 2018. The Management Association’s industry group, Employer Associations of America (EAA), recently released the results of our 2018 National Business Trends Survey. According to the survey results, the majority of organizations continue to have an optimistic outlook for 2018 and are preparing for a positive year ahead. Illinois employers tend to be just slightly more optimistic than those in the rest of the country. Given our state’s ongoing challenges, this is a positive sign of the resilience of Illinois business leaders.
In terms of Illinois respondents, 63% expect their 2017 sales/revenue to be slightly or significantly better compared to 2016. This upbeat outlook prevails as 77% of executives project slight to significant increases in sales/revenue for 2018 as well. However, it should come as no surprise that the optimism is tempered by several serious challenges to business growth. The top challenges facing employers in the coming year include a shortage of skilled labor, economic factors, and government regulations.
Recruitment and Retention Challenges
The good news is employers are still hiring, with 39% hiring more staff than was planned in 2017, and 73% of executives indicating that hiring in 2018 will be due to increased staff levels and the addition of newly created jobs. With 62% reporting that difficulty in recruitment is escalating, employers cite a lack of available candidates (54%) and market competition (37%) as their primary challenges. Employers have addressed these difficulties in several ways:
What strategies have you implemented to overcome “recruitment” challenges?
|Increasing starting salaries
|Using temporary agencies, staffing agencies, or external recruiters
|Starting/increasing use of social media for recruiting
What strategies have you implemented to overcome “retention” challenges?
|Adjusting pay ranges upward
|Focus on staff receiving additional training/development
|Focus on staff retention in jobs where recruitment is difficult
Recruiting and retaining talent is top of mind for most businesses today. It is imperative that employers respond in innovative ways to their own unique market conditions and competitive landscape. Differentiating your organization is paramount to winning the war for talent.
Pay Challenges and Strategies
As in 2017, the spotlight in the coming year will be on competitiveness of pay to address both recruitment and retention challenges. In 2017, 82% of employers increased wages, and for 2018, 78% are already planning increases, while 42% are planning to use variable/bonus awards. The national attention on pay equity also has resulted in approximately one quarter of organizations taking action by conducting pay audits, analyzing the external compensation market, and/or establishing formal compensation structures.
Top Strategies for 2018
In preparing for 2018, employers report implementing the following measures: investing in new technology and equipment (54%), increasing their emphasis on recruiting (38%), and adding to their training budgets (31%).
As we look forward to 2018, companies need to ensure that they develop successful strategies to address the market challenges and create advantages for their organizations. The changing economic and regulatory climate will most definitely create additional hurdles to jump in the year ahead. I hope you take the time to delve into the 2018 National Business Trends Survey results to see how your own organization stacks up. As always, the Management Association will keep its finger on the pulse of workplace issues in 2018 and stands ready to assist you with the challenges you face.
The Management Association is an active member of the EAA which sponsors this annual survey to equip executives with insights and trends for business forecasting, investment decisions, talent management, and compensation planning. The 2018 Survey included 1,528 participating organization (1,048 from the Midwest and 196 from Illinois), with responses covering 2,741 employer locations in a wide array of industries throughout the United States.