Street Talk: Nightmares on Main Street
What keeps employers awake at night?
According to Employer Associations of America’s 2017 National Business Trends Survey, there are plenty of reasons for nocturnal nightmares.
Despite strong optimism, employers continue to face economic challenges relating to talent recruitment. Sixty-two percent of employers reported recruiting is becoming more difficult, with half of those indicating dissatisfaction with their current recruiting efforts. The problem is critical, as 32 percent indicated they had hired slightly to significantly more than planned in 2016, and for 2017, 48 percent of employers reported plans to increase staffing, with talent acquisition remaining a top priority. The positions most difficult to recruit include skilled production workers, professional workers and high potential middle managers, while the most difficult to retain are entry-level workers.
“The real story here is how employers are overcoming recruitment challenges,” said Michael Severns, chair of the EAA board. “Employers need to be very creative in their recruiting efforts, especially in an age where candidates have more power than ever before.”
Compounding the recruitment challenges, survey respondents reported concerns over wages, benefit costs and skilled labor shortages. When asked about serious short-term business challenges (within the next year) and long-term challenges (within the next five years), these were the top four:
Skilled labor shortage with 41 percent fearing a short-term issue and 50 percent seeing it as a long-term problem; ability to pay for benefits costs with 37 percent and 56 percent, respectively; costs of regulatory compliance, 37 percent and 47 percent; and ability to pay competitive wages, 33 percent and 44 percent.
Employers report varied strategies to overcome both recruitment and retention concerns, according to EAA. The top-three strategies for both include adjusting pay ranges upward and focusing on existing staff retention in jobs where recruitment is difficult. The third top strategy focuses on training. For recruitment, that means filling jobs with existing staff who lack job skills but have potential to learn. On the retention side, this includes providing additional training and development to current employees.
Severns said other notable survey data showed 76 percent of business owners expect their 2016 overall business results to be the same or better than 2015. Executives also felt strong optimism for 2017 as compared to 2016, with 89 percent indicating overall business results will be the same or better in 2017. Even though wages and benefits remain challenging, 81 percent of organizations increased wages in 2016, with 35 percent paying variable or bonus awards. The survey indicated 75 percent of employers plan to increase wages in 2017, with 34 percent looking at variable/bonus pay.
Locally, 57 percent of respondents say they are planning to increase their workforce in the next year. Fifty-two percent say skilled production workers still are the most challenging group to hire and entry-level employees the hardest to retain (43 percent). To combat these issues, the survey indicated employers are increasing starting salaries (63 percent) for new hires and increasing pay rates to retain current employees (62 percent).
Money isn’t everything, however.
According to the Michigan breakout of the survey, the top-five workplace features the younger workers are looking for include flexible hours, work-life balance, opportunity for advancement, higher pay and recognition.
“Today’s employment candidates have so many more choices and tools. If employers want to remain competitive in their efforts to secure top talent, they need to adjust their strategies,” Severns said. “Our National Business Trends Survey allows executives to make data-driven decisions, and it provides comparative information on how executives plan to approach business challenges in 2017.”
The EAA is a not-for-profit national association that provides the annual survey to help business executives identify trends for business outlooks, business investment plans, staffing levels, hiring plans, job creation, pay strategies and business challenges. The 2017 survey included 1,270 participating organizations with responses covering 2,104 employer locations throughout the U.S.
By the numbers
Grand Rapids Opportunities for Women closed 2016 with some noteworthy business development numbers.
GROW CEO Bonnie Nawara reported the economic development agency helped form 68 businesses during the year, resulting in 251 new jobs. Participants also took advantage of 1,377 hours of business training and 860 hours of business counseling offered by GROW counselors.
For the year, GROW businesses collectively reported annual revenues of more than $26 million. The organization also received federal certification for its expanded micro-loan program and launched several new programs, including EmpowerHER, a yearlong business mentoring program to assist second-stage businesses in scaling up their companies.
Overall, GROW worked with 754 individuals on starting or growing their businesses and experienced an 88 percent increase in the number of business counseling hours provided by staff.
Nawara said GROW’s expanded presence in the community is fueling the economy in unexpected ways. She pointed to Mallory Root, owner of Roots Brew Shop on the West Side, as an example of GROW’s expanding opportunities.
Root came to GROW for funding, but discovered the support network and entrepreneurial resources were just as beneficial.
“There are always things to learn, and you don’t need to know everything to get started,” Root said. “You just need to start. Surround yourself with great friends, family and supporters to keep you going.”
That sort of testimonial is music to Nawara’s ears.
“As one of only three Women’s Business Centers in Michigan certified by the federal Small Business Administration, continuing our work here in Grand Rapids is critical,” she said.
Starting Jan. 1, Aquinas College will change its mailing address, which is currently 1607 Robinson Road SE.
The Grand Rapids-based private Catholic liberal arts college now will direct its visitors to the newly remodeled main entrance of the college on Fulton Street.
The new entrance, according to Carl Apple, associate vice president for communications, marketing and public relations, includes a sculpture of St. Thomas Aquinas, the patron saint of Aquinas College.
The new mailing address of the college will be 1700 E. Fulton St., Grand Rapids, MI 49506-1801.
Mail sent to the old address will continue to be forwarded by the post office for six months. But the college asks that anyone doing business with Aquinas send mail to the new address beginning in 2017.
Aquinas College, an inclusive educational community rooted in the Catholic and Dominican tradition, provides a liberal arts education with a global perspective, emphasizes career preparation focused on leadership and service to others, and fosters a commitment to lifelong learning dedicated to the pursuit of truth and the common good.
Home, sweet home
With Trulia naming Grand Rapids one of the housing markets to watch in 2017, it likely bodes well for West Michigan home builders.
In its annual forecast, the real estate website named Grand Rapids the No. 4 market to watch in the U.S., in large part because of Republican optimism for housing in the next year in the region. So, the housing market should go bonkers, thanks to Donald Trump winning the presidential election.
Grand Rapids is the only Midwest housing market on the list, which is mostly dominated by Florida metros.
The market, however, already was strong, according to Rockford-based home builder Sable Homes.
“Over the past few years, we’ve seen consistent growth in home construction development in West Michigan, and we believe our home sales will continue to trend upward throughout 2017,” Sable Homes President John Bitely said.
Sable Homes closed sales on 120 new homes in greater Grand Rapids, 17 more than 2014 and seven more than 2015.
Housing start stats were the highest they’ve been since the Great Recession in the third quarter of 2016, according to the National Association of Home Builders. The 10.7 percent increase to an annual rate of 869,000 single-family home starts is the highest total since October 2007.
The NAHB expects 2016 to finish with 1.16 million unit starts, with 1.25 million estimated in 2017 and 1.33 million in 2018.
Bitely expects the housing market in West Michigan to continue, regardless of Trulia’s ranking or the association’s projections.
“Grand Rapids, Michigan, is a wonderful place to work and build a home for your family,” Bitely said. “It is an exciting time to be part of the West Michigan culture and experience everything the area has to offer.”