Employer Associations of America Releases 2016 National Business Trends Survey

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Labor Shortages Lead to Tempered Optimism and Focus on Recruiting and Training Strategies

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“Despite strong sustained optimism for 2016, employers are focused on long-term challenges that affect their competitive position and ability to attract and retain a vibrant workforce,” states Mary Lynn Fayoumi, Chair, EAA Board of Directors.

Employer Associations of America (EAA) announced today the completion of the 2016 National Business Trends Survey. The EAA, a not-for-profit national association consisting of 33 regional employer associations, provides this annual report to business executives, arming them with insight on 2016 business trends in the areas of:

  •     Business outlook
  •     Business investment plans
  •     Staffing levels
  •     Hiring plans
  •     Job creation
  •     Pay strategies
  •     Business challenges

“Despite strong sustained optimism for 2016, employers are focused on long-term challenges that affect their competitive position and ability to attract and retain a vibrant workforce,” states Mary Lynn Fayoumi, Chair, EAA Board of Directors. “The 2016 National Business Trends Survey allows executives to make data-driven decisions and provides detailed information on how other executives plan to approach their business in 2016.”

An Optimistic Outlook
Results from this comprehensive survey of 1,242 organizations, covering 2,814 employer locations and 45 U.S. states, indicate that the majority of executives surveyed remain optimistic for 2016, are confident they will award pay increases, will provide a heightened emphasis on recruiting, and plan to increase training budgets that focus on developing their existing employees.

When asked to compare their 2015 business results to 2014, 78% of executives surveyed reported that 2015 was about the same or better than 2014. Eighty-seven percent of executives indicate their projected 2016 business results will be the same or better. This optimism is seen in the general economic outlook, as 93% of survey respondents expect the overall 2016 economic outlook to be about the same or better in comparison to 2015 where as 88% of employers reported the economy this year was the same or better compared to 2014.

Business Outlook: Short- and Long-Term Challenges Keep Executives Focused on Effective Strategies
Despite an optimistic outlook, both short-term and long-term challenges continue to daunt employers. The top five “serious” challenges for their businesses: skilled labor shortage (33% short-term and 41% long-term), ability to pay for benefit costs (23% short-term and 38% long-term), competition in general (27% short-term and 34% long-term), cost of regulatory compliance (27% short-term and 34% long-term), and professional/technical staff shortage (23% short-term and 30% long-term).

Note: Short-term: within next year; Long-term: within next 5 years

Compensation Strategies Show Strength
Employer confidence continues improvement from one year ago, with 85% of participating organizations reporting pay increases in 2015. This is higher than the 78% of organizations that had planned to award increases a year ago.

Compensation strategies for 2016 also demonstrate high employer confidence:

  •     Again, 78% of respondents report plans to award wage/salary increases in 2016
  •     34% plan to award variable/bonus awards
  •     11% will give lump-sum awards during the year

Only 6% of the executives report plans to freeze or reduce wages/salaries in 2016. This indicates a positive trend compared to the 10% who either froze or reduced wages/salaries in 2015, and the 13% who froze or reduced wages/salaries in 2014.

Increases in Hiring Continues Growth Trend
Increases in staffing levels for 2016 are expected for 52% of employers responding to the survey, similar to the 55% that increased levels this year. When asked the primary reasons for their 2016 hiring plans, 89% of the executives said they will be in full or in part replacing staff due to voluntary turnover, and 78% said their hiring will be to fill newly created jobs.

The positions most difficult to hire and retain remain professional staff, as cited by 44% of respondents. This is closely followed by skilled production workers (42%). Sixty-two percent of employers plan to emphasize recruiting in 2016, up from 49% in 2015.

Training Investments for Existing Employees
To overcome challenges in recruitment and retention, 51% of executives said they plan to continue increasing their 2016 training budgets. A key focus is providing existing staff with additional training/development (61%). Fifty-two percent of respondents are filling jobs with existing staff who lack the job skills but have potential and nearly 50% are focusing on improving staff retention efforts where recruitment is difficult.

The following are the top five measures that executives say they implemented in 2015 or are planning to implement in 2016 to strengthen business results (listed in order of the top 2016 responses): invest in technology (63% in 2015 and 78% in 2016), invest in equipment (58% in 2015 and 71% in 2016), increase recruiting emphasis (49% in 2015 and 62% in 2016), lean/process improvement (44% in 2015 and 53% in 2016), and increase training budget (32% in 2015 and 51% in 2016).

Survey Information
EAA data reflects a national perspective. A total of 1,242 distinct organizations, covering 2,814 employer locations spread out over all 50 states, and Washington D.C. In addition to reporting significant trends on a national level, the 2016 National Business Trends Survey offers a trends summary and detailed reports at the regional level for the Midwest, Northeast, Southern, and Western regions. The survey was conducted in October and November of 2015.

The percentage of respondents and their respective industries include 45% from Manufacturing, 8% from Professional and Business Services, 5% from Financial Services, 4% from Health Services, and 38% in other industries (Social Services, Education, Retail, Construction, etc.). The survey also represents organizations of all sizes: 1-99 employees (52%), 100-249 employees (25%), 250-499 employees (13%), 500-999 employees (5%), and 1,000+ employees (5%).

About Employer Associations of America
The Employer Associations of America (EAA) consists of 33 regional employer associations that serve 35,000 companies and more than six million employees. The EAA’s mission is to advance a national presence and to promote local success among members through unparalleled collaboration, excellence, and efficiency. The regional employer associations that make up the EAA are dedicated to serving their members and are trusted partners that help members maximize the performance of their employees and their organization. The employer associations’ human resource and business professionals provide businesses with expertise in the areas of compliance, recruitment, retention, surveys, safety, training, and organizational development. To learn more about the EAA and membership, visit http://www.eaahub.org.


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