AGH recently conducted an online survey of local business leaders across industries to capture organizational trends and potential effects of the current economic and hiring climates.
Questions were focused on areas AGH considered most important to businesses navigating the current labor environment. Areas surveyed included:
- Compensation trends
- Work flexibility
- Paid time off (PTO)
- Retirement plans
- Mental health
- Financial communications
Here is what we found.
Sizable and frequent pay increases
Organizations increased pay by significant amounts and more frequently than ever over the last 12-18 months. Across all industries, organizations increased position or individual pay by as much as 20-30%. One organization provided three increases over the last 12 months totaling 12% across all positions; increases were even higher in hard-to-fill positions.
While employers must focus on entry-level pay and pay for hard-to-fill positions to attract talent, equal attention should be given to pay for current employees to mitigate pay compression issues. Pay compression occurs when there is little difference in pay regardless of differences in employees’ knowledge, skills, experience, and abilities. Failing to address pay compression could cause new employees to be paid close to or higher than tenured employees, which can create significant morale issues and employee turnover.
Employees want more Paid Time Off (PTO) and work flexibility
Employers that provide generous PTO policies create an environment that encourages employees to manage personal needs and general well-being, creating a more productive and loyal workforce. Employers can create a competitive advantage by increasing paid time off offered to employees.
- 43% offer 40-80 hours of PTO or vacation upon hire for hourly employees
- 43% offer 80-120 hours of PTO or vacation upon hire to salaried employees
- The median maximum accrual rate for employees is 160 hours annually.
- 37% offer paid maternity leave.
Providing flexibility in work arrangements, location, or schedules is another way employers can help employees manage personal needs and general well-being. Offering options for remote work can help as well. Coming out of the pandemic, we asked organizations about their remote work plans for the next 6-12 months:
- 44% said they would offer remote work options some of the time for all employees
- 9% said they would offer full-time remote work options for all employees
Employers attracting and retaining the best talent consider additional opportunities to give the work-life integration that today’s workforce seeks. The most successful organizations find ways to make work work for their employees. Consider if a hybrid or remote work arrangement can bring the productivity your organization needs while providing the flexibility employees seek.
Attention to mental health is needed
Organizations perceive employees to be experiencing significant or ongoing stress and burnout.
- 68% believed their employees are experiencing significant or ongoing stress
- 57% believed their employees are experiencing burnout.
Organizations can encourage mental health wellness by offering mental health benefits beyond the employer health plan, training employees and management to recognize/respond to stress and burnout in the workplace, and providing an employee assistance program (EAP). 60% of respondents currently offered an EAP. Assess your current mental health benefits and determine if they are aligned with the needs of your employees/applicants.
Good communication includes bad news
Employers should communicate more frequently about the organization’s financial position and its response to a potential recession. Survey respondents were asked whether their organization communicated its financial position/health to all employees:
- 47% – Yes
- 15% – No
- 38% – of employees indicated the organization communicates financial health to some but not all employees
By providing transparency, workers may feel more committed to helping their organization navigate challenging times. A lack of or limited communication can create uncertainty and fear in employees’ minds, causing them to seek employment opportunities that they perceive to be more stable.