Playing the Numbers
While there is some general optimism to be found in the results of the latest Employer Associations of America National Business Trends Survey, especially when it comes to projected revenues and plans for additional hiring, the twin challenges of attaining and then retaining top talent loom large in today’s business climate.
Mark Adams said he was somewhat surprised by some of the responses in the recently released Employer Associations of America National Business Trends Survey.
For example, he thought more businesses would list paying heightened benefits costs as a serious challenge given recent additions such as paid family and medical leave, part of the state’s so-called grand bargain; 28% listed it as a considerable challenge in the short term and 44% in the long term, and Adams, director of HR Services at the Employers Assoc. of the NorthEast (EANE), thought both numbers would be higher.
The same with employers’ ability to pay competitive wages at a time when the minimum wage is going up, pay equity is now the law, and employers in several fields, especially manufacturing, are waging a pitched battle for top talent. Only 34% listed it as short-term challenge, and 43% a long-term challenge.
“With the rise in the pay-equity legislation, I thought there was going to be concern about how businesses could stay on that trajectory,” he explained, “especially when to get into compliance with some of that requires making some unilateral adjustments in pay ranges and scales.”
But what stands out in the recent report, which involved 1,200 business executives in all 50 states, isn’t what’s mildly surprising — it’s what’s not at all surprising.
Specifically, it’s that talent acquisition and talent retention top the list of serious challenges, again. Or ‘still,’ to be more precise.
It has been a challenge for some time as unemployment rates have fallen and Baby Boomers have begun retiring in significant numbers, said Adams, adding that, even as signs of the economy cooling off grow in number, finding qualified workers remains problem number one for businesses across virtually all sectors.
“Increasingly, when it comes to what it takes to be attractive to a potential candidate today, it’s not just going to be wages and benefits.”
And what employers are realizing is that, to address the challenge properly, they need to focus on more than the many facets of compensation — although those are certainly important factors — especially when it comes to the Millennial generation.
“Increasingly, when it comes to what it takes to be attractive to a potential candidate today, it’s not just going to be wages and benefits,” said Adams. “It’s going to be how a company looks culturally and how a company looks in terms of its reputation, and all this starts at the top.
“To many, especially Millennials, culture is as important as what they make,” he went on, adding that it is incumbent upon top management to put a company in the best position possible, not only when it comes to recruiting talent, but within the community.
As for exactly what Millennials are looking for (if not demanding), which has become the $64,000 question in business today, Adams said it varies with the individual, obviously, but what most want is a “personalized experience” in the workplace.
“They want to have more control over their career development and their career paths — they want paths that are personalized to them,” he went on. “And this gets into everything from how work is structured to how teams are formed … you’re not necessarily doing the same job day in and day out, and you might be working with different people on different projects at different times.”
For this issue and its focus on employment, BusinessWest goes beyond the numbers in the latest National Business Trends Survey for a deeper dive into the ongoing challenges of talent acquisition and retention, and what employers must do to address them.
But first, the survey results.
They show a decent amount of optimism, said Adams, adding that the amount expressed is likely a function of the timing of the survey — last fall, before the stock market began a significant tailspin that culminated in its worst Christmas Eve in 90 years (it has obviously bounced back since) and far greater use of the dreaded ‘R’ word (recession) among economists.
Indeed, 60% of those surveyed expect the overall outlook for 2019 to be roughly the same as 2018, and nearly a third (28%) expect things to be better. Meanwhile, 73% of those polled project slight to significant increases in sales and or revenues, and 57% of the executives surveyed plan to increase staff in 2019, while another 36% plan to maintain 2018 staff levels during 2019.
Overall, 92% of the respondents said they will be replacing staff due to voluntary turnover, and 77% said their hiring will be to fill newly created jobs.
“Timing is everything when it comes to these surveys,” said Adams, referring to how the numbers might be different if the polling was done a few months later. “But at the roundtables that I chair, when I put those specific issues as agenda items and say, ‘has anything given you pause to take a step back and reassess what your projections were for 2019?’ most said the answer is ‘no.’”
Meanwhile, when it comes to hiring, most employers are still looking to hire into their own payrolls, rather than using temporary help, due to rising benefits costs and other factors, said Adams, which is still another positive indicator when it comes to the overall confidence level among area employers.
But while those numbers — and those answers at EANE’s roundtables — are encouraging, the harsh reality is that many employers will face a steep challenge as they go about filling these positions, said Adams — and for many reasons.
Part of the problem is simply a lack of talent, an issue in many fields, especially manufacturing, a sector with a proud history in this region but one that has struggled mightily to attract young people in recent decades.
But another component of the challenge is attracting those who do have the talent to your company, he went on, swinging the discussion back to that concept of culture, Millennials, and how employers have to be focused on much more than salary and benefits.
But when they do focus on benefits, they should do so with an eye on being innovative, said Adams.
“It’s not enough anymore to offer health and retirement, and, yes, paid time off is always an issue, and they’re looking for more of that than ever before,” he noted. “It’s about being innovative and perhaps helping them with their student-loan challenges and things of that nature.
“They want to be well-compensated, but they’re really looking for benefits in a working arrangement that allows them to achieve more flexibility and more of a personal allocation of their time in the workplace that meets their needs,” he went on, adding that many companies are not responding quickly or profoundly enough to these relatively new wants and needs, and this goes a long way toward explaining why they are struggling to not only attract but also retain talent.
But he acknowledged that responding isn’t easy, and it involves looking beyond the traditional when it comes to everything from benefits to schedules to the overall culture of the company.
“It comes down to how much companies are willing to change how they do business to meet those needs,” he told BusinessWest. “Companies have these traditional schedules and shifts, and are today’s young people going to want to work on those timetables?” he asked rhetorically. “Or do we need to adapt to what they’re looking for?”
“It means looking at your business model down to the core,” he continued, “and not just say, ‘OK, we’ll add a couple of extra personal days or change our health plan design or change the matching on our 401(k).’ If you’re talking about changing culture and providing innovative benefits, and changing scheduling to make things more flexible, it means going much deeper than that, and that’s a challenge for some companies.”
Raising the Stakes
Indeed it is, but as the latest National Business Trends Survey reveals, finding and retaining talent is the most pressing issue confronting employers today, and will be for the foreseeable future.
Behind those numbers, Adams explained, lies a need for businesses to dig deep, be innovative, and look not at what’s worked in the past, but at what is likely to work today and in the future.
That’s the only way those numbers are going to change.
George O’Brien can be reached at [email protected]