A ‘new normal’? Companies boost financial and non-financial investments in workforces: ERC survey

While for most of the past 16 years, companies reported that hiring and retaining talent was their biggest challenge, the 2016 ERC/Smart Business Workplace Practices Survey found that it is true again, but that the atypical business experiences of the past few years seem to be indicating the “new normal” has arrived.

This year’s survey showed that out of 117 companies surveyed, a majority of them, 36.8 percent, listed hiring and retaining talent as their No. 1 issue, down from 41.7 percent last year and 45.9 percent the year before.

cle_erc_TrendingChart_0916The ERC and Smart Business Workplace Practices survey, which has been a collaborative effort since 2001, aims to find out how Northeast Ohio companies are driving their businesses forward.

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Pat Perry

One key observation made by Pat Perry, president of ERC, is about the “new normal” that the data suggests.

“If this year’s survey results are any indication, most employers have finally reached somewhat of a ‘new normal,’ he says. “While we may never see double-digit wage adjustments again, and the scars from the 2008 recession have yet to fade away, employers appear to finally be getting back to basics and refocusing on the primary challenge they face as individual organizations and as a region — attracting and retaining talent.”

Companies are increasing both their financial and non-financial investments in their workforces as one way to address the talent concerns. The survey found that 84 percent of employers provide financial assistance for job-related training and development.

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Stephen Ligus

“The ‘new normal’ the data suggests is consistent with the broader scope of the changing workforce,” says Stephen Ligus, president of the Cleveland Society for Human Resource Management (SHRM). “The direct costs to an organization in terms of finding, training and replacing talent continue to rise. If those lost members are your future top performers, the indirect loss to your organization may be exponential.”

Organizations are realizing that the direct investments in onboarding and continuing to develop members of their teams is not only good for culture and morale, but is good for business, Ligus says.cle_erc_PieChart1_0916

Talking about my generation

This year’s survey was the first to find that generational transition is among the top challenges. This situation is a type of double-edged sword for employers — baby boomers are retiring and millennials are making up a significant part of the workforce — and each case is having an impact.

An increase of millennials and fewer baby boomers in the workforce is hardly news, so the fact that 16.7 percent of respondents called it their biggest challenge is a significant finding.

Companies for the past few years began to wonder why younger employees were motivated differently than the ways generations before them were. It used to be that fair pay, the opportunity to advance in one’s career and financial security would attract and retain bright young talent. But the rules may be changing with millennials.

And the good news is that employers are preparing for what this will look like at their companies.

  • Mentorship programs are up 13 percent over last year to 35 percent.
  • Seventy percent of employers offer one or more flexible work arrangements to their employees.
  • On average, employers have promoted 10 percent of their workforce last year.

cle_erc_PieChart2_0916“While this list by no means is exhaustive in how organizations are preparing for the ongoing departure of boomers and the rise of millennials (not to mention Generation Z in the near future), it does indicate that local businesses are committed to creating workplaces that will attract and retain the best and brightest in Northeast Ohio for generations to come,” Perry says.

These are trends that will continue and make good business sense for the transition underway throughout the economy, Ligus says.

“Baby boomers have worked hard throughout their careers, often at the sacrifice of vacation time, hobbies and so on,” he says. “They now face a challenge of wanting to take advantage of all their hard work, but yet may not be ready to step away from their careers that long have been an important part of their identities.

“At the same time, baby boomers know the expected length of their retirement years will be much longer than any previous generation.

“This not only elevates the desire to remain an active participant in what they have helped to build throughout their careers, but may place practical financial requirements on them to continue to earn income for longer periods than traditional retirement,” Ligus says.

However, the generation entering the workforce needs skills and resources from those baby boomers. By developing programs that answer this need and provide both generations what they need, organizations are able to effectively transfer expertise to a new generation, he says.

cle_erc_PieChart3_0916“The investment in such programs not only demonstrates the value of those that have helped to make the organization what it is today, but shows the newest members of the team the value in their futures,” Ligus says.

Much has been written about millennials’ tendency to move between jobs every few years. However, Ligus downplays these observations.

“There is no reason to believe they would be different than any other generation before,” he says. “In general, people want to be a part of something where they understand the mission and vision, feel that they are making an impact on success and understand the plan for future growth and development. That is exactly the aim of the most impactful of these programs.”

Safety more now than ever

In a time where it is growing as a concern, one policy area where the survey saw increases across the board this year was workplace safety.

From putting together disaster recovery plans to requiring drug tests for employees after a workplace-related accident, employers are increasingly focused on making sure they have policies and procedures in place to ensure the basic safety of all employees while they are on the job.

There was a 2 percent increase in the organizations reporting having written safety program and safety procedures in 2016, from 85.1 to 87.1 percent.

cle_erc_PieChart4_0916Other safety related policies that reached new heights this year include “prohibition of firearms and/or weapons from the workplace” (89 percent) and having a disaster recovery plan (73.7 percent).

“As an employer, you hope that you will never have to put these safety procedures into action, but the fact that more organizations are taking the time to assess what types of mechanisms they have in place and then fill in the gaps as needed is an undertaking that should be applauded,” Perry says.

A total of 78 percent of organizations reporting said they require drug testing for employees after an accident, a 5.8 percent increase since 2015. About 21 percent of employers this year have random substance abuse tests, up from 16 percent last year.

The survey found an increase in workplace bullying and violence incidents reported. Of all organizations, 20.4 percent reported having incidents, as compared to 11.2 percent last year. Incidents of violence were 7.4 percent, up from 5 percent last year.

Wage issues

cle_erc_PieChart6_0916The survey found that employee wages were mostly stagnant, with just 3 percent annual adjustments for most workers over the past decade.

“Although compensation is not always the strongest or only motivation for joining or staying with a company, it appears that employers seeking only the best and brightest potentially could do more to reward their best employees and ultimately relieve some of the challenge they face related to recruitment and retention,” Perry says.

In addition, the survey found that the number of companies offering cash bonuses to management and non-management were down slightly.

“This is certainly a situation companies should review,” Ligus says. “After so much emphasis and investment in training, flexibility and culture, the last thing an organization should want to see is talented individuals leaving a company because they are unable to achieve the economic growth they desire.”

This goes back to the idea that organizations need to put in place effective training and development programs, and set expectations around career path development, he says. “While the average cost of living increases will continue near inflation by definition, career-pathing and development plans should be used to help set a course for continued growth within the organization.”

Ligus also feels that it is important that organizations review the competitive landscape of their total rewards programs routinely versus waiting for the direct marketplace analysis of their programs by watching top talent move to competitors that have richer rewards programs.

Exit strategy?

Another point of interest that Ligus sees pertains to the significant drop (4.5 percent) over 2015 figures in the percentage of organizations providing ownership opportunities for non-management employees.

Only 6.4 percent of employers report providing this opportunity.

“This is interesting in the broader context of mergers and acquisitions in general,” he says. “Is M&A outpacing ESOP, as an example, as an exit strategy for the founders? This will certainly be something to watch over the coming years.”

How to reach: ERC, (440) 684-9700 , (877) 696-3636 or www.yourerc.com

 

Better understanding would help reduce challenges faced in hiring veterans

Bryan McGown

Bryan McGown

Many military veterans seeking employment share a common conclusion — they feel hiring managers often do not understand their skills and experiences. As a result, both companies and veterans are missing connections.

In a survey recently conducted by ERC in collaboration with the volunteer organization NEOVETS, about one-third of participants reported a lack of understanding about mapping military skills onto civilian job skills and 28 percent reported a lack of resources to identify and conduct outreach to veterans.

One of the questions the survey asked was, “In a few words, what factors do you perceive as standing in your way of locating military veterans and spouses to work for your organization?”

Among the organizations that wrote comments, all held a similar perception that the types of jobs they offered would not interest veterans, chiefly due to the low level and somewhat unskilled nature of the positions.

Challenges in terms of making the transition from military to civilian cultures also ranked high on the list of employer needs.

There were some concerns over physical or mental health (most commonly Post-Traumatic Stress Disorder) issues that employers may face when hiring military veterans. Although the ADA covers many of these health-related issues, there are additional resources both nationally and locally for employers looking for support in working through them.

A few participants in the ERC survey indicated that they faced challenges in getting their entire workforce/co-workers to feel as positive about employing veteran employees as the employer feels. Unfortunately, respondents did not share specific concerns that employees may have about their veteran co-workers.

NEOVETS board member Bryan McGown worked with other board members to compose the survey questions.

“We are trying to gauge a sense from the community that they understand the benefits of hiring veterans,” he says.

McGown says there is an obvious opportunity for employer and employee education that could help alleviate many of these concerns and ultimately serve to improve the public’s understanding of military life.

How to reach: [email protected] or www.gunnyret.com

 

Organization helps veterans transition into employment

Rick DeChant and a cross-section of community supporters founded Northeast Ohio Veterans (NEOVETS) about 2 ½ years ago when they saw there was no umbrella group to help Northeast Ohio military veterans.

DeChanNEOVETS CMTE Handshake logot, executive director of veterans initiatives for Cuyahoga Community College, says the primary focus of NEOVETS is to connect military families, veterans and current military members to employers in Northeast Ohio and conversely to connect employers to the military community through workshops and outreach.

“We’ve offered several training workshops about the military culture,” DeChant says. “Who are veterans? What are the kinds of background they’re coming from? What are the military training models and what can they bring to companies?”

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Rick DeChant

NEOVETS also has developed a program to certify organizations as a Certified Military Talent Employer (CMTE).

“We are one of the first in the area to do this,” he says. “Right now a lot of programs say, ‘Oh, we are military friendly,’ and it’s based on the honor system. There is no backup, training and documentation, and that’s what we have put together.”

CMTE designation lets veteran job seekers know that the employer welcomes and understands them, providing employers a competitive edge in recruiting quality talent to their business.

“And you just don’t earn it once,” DeChant says. “You come back for refresher and recertification. So it adds depth and adds credibility to a company that wants to hire veterans, wants to be veterans-friendly, and now there is documented training and certification to support that.”

Five companies have obtained CMTE status: the Cleveland Clinic, the Northeast Ohio Regional Sewer District, Park Place Technologies, Jakprints and Nagle Companies, of Toledo.

Another NEOVETS initiative is the Community College Collaboration, in which the organization partners with the schools to fill training need gaps.

“It’s where that veteran candidate is about 90 percent there, but needs some training in X, Y or Z to get there,” DeChant says. ”Cuyahoga Community College, Lorain County Community College and Lakeland Community College are on board.”

“We are really hoping for this program to explode,” McGown says. “With the college collaborative that we have now, I think we will have a lot more credibility and support to help us grow this program, both regionally and even nationally.”

How to reach: NEOVETS, (216) 245-8376 or www.neovets.org

 

Eaton highly values skills of military veterans

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Matt Philpott

Eaton, a $21 billion global technology leader in power management solutions, values the contributions of the men and women who have served our country and are now making daily contributions to its continued success.

The company has found that veterans have outstanding leadership skills, are service and safety focused, are continuous learners and maintain a commitment to ethics, characteristics that are fundamental to Eaton’s sustained growth.

Matt Philpott, U.S. Marine Corps captain, has successfully transitioned to a production supervisor at an Eaton Electrical facility in Sumter, South Carolina.

“During my transition from the Marine Corps, I was looking for a company that valued its people and carried itself with integrity and dignity. After talking to the people at Eaton, I found many individuals who were very passionate about their work and treated each other with respect and trust.

“Having experienced a similar sense of teamwork in the Marine Corps, I knew that Eaton would be a great fit for me. Eaton does an outstanding job of rewarding talent and pursuing a culture of continuous improvement. I look forward to my career here at Eaton.”

Veterans like Philpott are immersed in Eaton’s global workforce in a variety of functions. Recently, a team of Eaton leaders presented a session about lessons learned related to successful veteran hiring and retention efforts.

The session was at a NEOVETS Conference at Lorain County Community College, a member of the Community College Consortium, specifically for the NEOVETS employer certification for veteran hiring (CMTE).

The NEOVETS sessions provided the tools essential for employers of all sizes to attract, hire and retain veterans. Northeast Ohio has the highest veteran population in the state, and Ohio has the sixth largest veteran population in the United States.

Eaton’s veteran recruitment efforts have earned the company considerable recognition. Eaton has been named a Military Friendly Top 100 Employer, Best for Vets Employers, Veteran Friendly Employer and Most Valuable Employer, Military. ●

How to reach: Eaton, www.eaton.com/Eaton/Careers/learn/Military/index.htm

Having skilled workers a key to building a better workforce

Today, more than ever, it is important to build a strong, productive and engaged workforce. For any business, the success and growth of a company starts with its employees.

Roto-Rooter LogoPart of building a better workforce includes having skilled labor, such as plumbers, electricians and HVAC specialists. The challenge today is that, in addition to the growing shortage of skilled workers in these industries, many are approaching retirement age.

Companies like Roto-Rooter Plumbing & Drain Service have found that having a specific plan in place to attract and retain talent helps fill the immediate need, as well as keep the pipeline full.

“It all starts with recruitment,” says Paul Abrams, spokesman for Roto-Rooter. “Hiring and developing talent is one of the most significant investments a business can make. Getting the right people on board is a vital step in building and maintaining a workforce.”

Participating in appropriate job fairs, partnering with organizations such as Job Corps and recruiting in the digital space are all ways to attract qualified skilled workers. An added benefit is that plumbing is one of the most attractive career paths in the U.S. right now. It’s stable, recession-proof and has great earning potential.

“A career in plumbing has tremendous growth and income potential, and offers flexible work schedules, great benefits and on-the-job paid training,” Abrams say. “Plumbers are in high demand now because many are retiring faster than they can be replaced in the workforce.”

Another potential advantage to a career in skilled labor is that you don’t need a college degree to earn certification, and there are a number of advancement opportunities once in the field. Many companies also pay for continuing education. Roto-Rooter, for example, operates its own plumbing schools and pays for continual training, testing and licensing.

Jobs in skilled labor have become ideal careers for women and military veterans because they are stable, rewarding and family-friendly.

According to the Bureau of Labor Statistics, there are currently 495,000 unemployed military veterans. Plumbing is an ideal match for veterans because they are natural problem-solvers, they are used to structure and following a set of standards and they can keep up with the physical demands of the job.

“We would hire 500 skilled plumbers this year if there were enough skilled repair plumbers available to us,” Abrams says. “Part of our job is helping people understand the need for skilled trade workers and the important role they play in our workforce and our economy.”

“Less than 1.5 percent of plumbers are women. Because there are few females in the field, there is great job security. And these careers offer women the chance for meaningful work with high wages.”

How to reach: Roto-Rooter, (800) 768-6911 or www.rotorooter.com .