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Association: Business outlook slips for 2020
National employer group finds executives are responding with caution to reports of softening economy.
The Employer Associations of America (EAA) just released its 2020 National Business Trends Survey, and it shows executives are feeling a little less confident about next year’s economy.
The EAA consists of 32 regional employer associations serving 35,000 companies and more than 6 million employees. The associations surveyed their membership and sent their responses to the national group for synthesis and publication.
The annual survey focuses on what executives are doing to address the changing business climate, and executives surveyed this year indicated that they are feeling a little less optimistic.
The majority of respondents (52%) felt the economy in the next 12 months would stay the same with only 12% feeling the economy would improve, and 36% feeling that the economy will decline.
Compared to 2019 survey results, respondents felt more confident that the economy would improve (30%) and only 12% felt there would be a decline. The numbers in these two areas flipped from last year to this year.
“Given the feelings about the economy in the next 12 months, it seems that organizations are taking a more cautious approach to 2020,” said Mary Corrado, EAA board chair. “Despite reduced confidence in the economy, 49% of organizations surveyed still expect a slight increase in revenue for the coming year. The talent shortage will remain a key factor in 2020. Employers will need to implement innovative talent acquisition and retention strategies to meet their business results.”
Maggie McPhee, director of information services at The Employers’ Association in Grand Rapids, said she was not surprised by the dip in optimism for next year.
“We’ve been riding a high wave for a long time, and it can’t keep going like this forever,” she said.
When asked on the survey what are the top challenges to their business in 2020, executives cited talent acquisition, talent retention, the ability to pay competitive wage/salaries, competition in the market and the ability to pay for benefit costs.
McPhee said local executives’ responses matched the national results regarding top current challenges.
A number of the survey questions focused on hiring and staffing practices. The amount of permanent staff members that executives plan to hire in 2020 is down slightly to 47%, as compared to 54% in 2019.
About 65% of respondents planned additional hiring in part due to newly created jobs.
The majority of executives (83%) indicated they were replacing employees due in part to voluntary turnover. Such an uptick makes talent acquisition more difficult, and employers will need to offer more competitive wages and be more strategic when marketing for positions, the EAA said.
Organizations said the top five most important factors job seekers are weighing are fairly similar to last year’s results:
Competitive pay: 81%
Good work/life balance: 69%
Opportunities for advancement: 56%
Flexibility in work hours: 56%
Competitive health benefits: 48%
The top three reasons respondents cited for why it has become more difficult to hire employees in their industries are:
Lack of qualified candidates: 66%
Market competition/high demand: 48%
Candidates want more pay than employer can/will offer: 43%
With the national spotlight on pay equity, new responses were added this year to the question, “How is your organization minimizing risk and ensuring compliance with federal, state and local laws?”
The top three responses include:
Conducting internal pay audits: 38%
Establishing/updating a formal compensation structure: 35%
Conducting external compensation analyses to compare internal positions with the external market: 29%
McPhee said West Michigan employers did not cite action they are taking on pay equity compliance, as they appear to be more concerned about the U.S. Department of Labor’s change to the Fair Labor Standards Act’s overtime exemption threshold, which takes effect in January.
The EAA 2020 National Business Trends Survey breaks results out on the state level as well as sharing the national data.
In Michigan, respondents identified the top three greatest challenges for 2020 as talent acquisition (59.5%), talent retention (47.3%) and competition in the marketplace (35.6%).
About 63% of Michigan respondents said they are expecting a slight or significant increase in revenue, and 15% expect revenue to decrease slightly or significantly.
More detailed information about the full survey or state-specific results is available by contacting McPhee at email@example.com or (616) 698-1167.
2019-20 Wage & Salary Survey findings
The Employers’ Association in Grand Rapids recently collected data from 272 West Michigan organizations (out of 944 surveyed) regarding their wage and salary increases in the past year for 354 jobs within 16 major job families.
Organizations were surveyed in eight broad industry categories: manufacturing durables, manufacturing nondurables, wholesale/distribution, professional/financial/insurance/other, construction, sales/service/retail, health care and nonprofits.
The survey responses revealed reported pay rates increased between 2.5% and 3.5% overall from 2018.
McPhee said it’s important to keep in mind that the rate of wage and salary increases in the past year does not necessarily mean wages are higher overall because as baby boomers retire, the younger workers replacing them are starting at lower pay rates.
Examples of pay changes from 2018-19:
Administrative assistant II — $40,175.89 in 2018 to $41,980.63 in 2019, an average increase of 4.4%
Accountant II — $55,038.50 in 2018 to $56,638.38, an increase of 3%
Buyer II — $58,614.34 in 2018 to $60,823.70 in 2019, an increase of 4%
Payroll supervisor/manager — $72,230.12 in 2018 to $73,751.91 in 2019, an increase of 2%
Assembler III (heavy mechanical production) — $18.31/hour in 2018 to $19.38/hour in 2019, an increase of 6%
Driver III — $19.56 in 2018 to $20.28 in 2019, an increase of 3.4%
Help desk II — $22.62 in 2018 to $23.05 in 2019, an increase of 1.9%
Tool and die maker III — $29.58 in 2018 to $29.91 in 2019, an increase of 1.1%