Michigan employers ‘cautiously optimistic’


A new survey shows despite ongoing labor shortages and talk of a late 2019 recession, most Michigan executives expect a year of growth and hiring.

The Employer Associations of America (EAA) released its 2019 National Business Trends Survey in November, indicating “a fair amount of optimism” on the part of business executives for 2019.

EAA conducted the survey in mid-fall and received 1,295 responses nationwide — 159 from Michigan employers, 66 of which were from members of The Employers’ Association, a West Michigan not-for-profit provider of human resource solutions.

Maggie McPhee, TEA’s director of information services, said although the report does not parse data below the state level, she believes the Michigan responses are “about the same” as what the West Michigan responses would be because “the economic situation is about the same” excepting higher wage trends on the east side of the state.

Most Michigan respondents (56 percent) said they felt the overall economy in the next 12 months will stay the same, 32.1 percent said they believe it will improve, and 11.9 percent said they feel it will decline.

This compares to a survey the Business Journal recently reported on conducted by Business Leaders for Michigan (BLM) that showed nearly all the state’s top business leaders expect the economy to stay the same or worsen in the next six to 12 months.

Only 3.7 percent of leaders surveyed by BLM expect Michigan’s economy to get better this year, a decrease from 74 percent at the start of 2018.

Seventy-seven percent of the TEA respondents to the EAA survey are in the manufacturing, warehousing and distribution sectors, which may be a factor due to the sector’s recovery and growth over the past several years.

McPhee said most of the 66 respondents are “cautiously optimistic” their business will “continue to grow” even as they projected the possibility of a flat or declining economy.

A solid majority (74.8 percent) of Michigan respondents said they expect to see a slight to significant increase in sales/revenue or budget in 2019 compared to 2018, up from 69.8 percent of respondents who projected a slight to significant sales/revenue or budget growth in 2018 over 2017.

Many of those Michigan employers (58.6 percent) plan to hire permanent staff in 2019 but say they expect the labor shortage to continue to hamper their efforts.

To help in the area of recruitment and retention efforts, 62.9 percent of Michigan respondents have increased starting salaries to help with recruiting efforts, and 62.9 percent of respondents replied that they have adjusted pay ranges upward to help with retention.

McPhee said executives listed the same top four “serious challenges” to their businesses in the short and long term: talent attraction, talent retention, the ability to pay for benefit costs and the ability to pay competitive wages.

Recruiting strategies respondents are tapping into include “focusing on culture, trying to sell the business as a place you would want to work,” offering flexible work schedules and “hiring temps in order to beef up their staff,” McPhee said.

“People are really looking at their cultures and environment and what they can do to become more attractive for current and future employees — and that’s somewhat new,” she said.

For retention, McPhee said the top three strategies respondents listed are adjusting pay ranges upward, implementing additional training and development for employees, and filling vacant positions with existing staff “who aren’t yet qualified” but could be with additional mentoring.

Survey says

The most important factors identified by prospective employees through the survey included:

  • Competitive pay (82%)

  • Good work/life balance (65%)

  • Flexibility in work hours (54%)

  • Opportunities for advancement (60%)

  • Competitive health benefits (53%)

The top five measures executives say they have been implementing (or plan to implement in 2019) to strengthen business:

  • Invest in technology (59%)

  • Invest in equipment (54%)

  • Increase recruiting emphasis (46%)

  • Increase training budget (37%)

  • Increase total rewards education (25%)

Source: The Employers’ Association via Employer Associations of America’s 2019 National Business Trends Survey

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