Workplace makeover: How Northeast Ohio companies are overcoming challenges in 2013

If you had any doubt about the recession being in the rearview mirror, consider this tidbit from the ERC/Smart Business Workplace Practices Survey. In the last 14 years, only two years — 2009 and 2010 — have returned results with Northeast Ohio companies reporting the poor economy as their toughest challenge. For the 11th year, companies in 2013 are reporting that their biggest challenge has been hiring and retaining talent.

The survey, which has been a collaborative effort between ERC and Smart Business since 2001, is aimed to let you know what companies in Northeast Ohio are doing to drive their businesses forward.

This year in particular showed an overwhelming amount of companies, 49.5 percent, listing hiring and retaining talent as their No. 1 challenge.

The other concern many Northeast Ohio workplaces have includes health care costs and the uncertainty of the Affordable Care Act (ACA). The good news is that a mere 5 percent of companies named economic conditions as the toughest challenge.

“Hiring continues to be strong,” says SueAnn Naso, president of Staffing Solutions Enterprises. “We see more and more companies adding recruiting talent, and it’s getting much more competitive to find those people, which is a good sign.”

Companies in Northeast Ohio are ramping up their recruiting efforts with 84.2 percent utilizing Internet job boards, and 50 percent utilizing social media to recruit talent.

“On the hiring side, you see a lot more LinkedIn activity,” says Lauren Rudman, president of the Cleveland Society for Human Resource Management (SHRM). “LinkedIn is still the No. 1 way to go, but I’ve also seen job opportunities pop up on Twitter and Facebook.

“Word of mouth is still a great way to go if your company has a referral program. Between social media, specifically LinkedIn, and word of mouth, those are still the No. 1 and No. 2 ways that work for recruiters and talent acquisition teams.”

While companies are finding ways to recruit more talent, they are also very focused on retaining that top talent once they have it.

“We’ve seen a continued emphasis on things like workplace flexibility and investing in training and development as ways to retain employees,” Naso says. “They’re focusing on keeping their turnover numbers as low as possible.”

According to the survey, 77.7 percent of companies provide financial assistance to employees to upgrade their skills through advanced education or job-related training. In addition, 28.6 percent offer a mentoring program.

“Training and development is a big one, especially for some of the millennials (Generation Y),” Naso says. “They really are focused on learning and growing, so I’ve seen a lot more hiring of people that do training and development, creating leadership training programs and having a leadership track so these young professionals see a career path and aren’t looking outside the company for growth.”

Today, there are more training and development programs than there were in the recent past and there are a couple of things that factor into that.

“One is the economy,” Rudman says. “Unfortunately, when things go bad, training and development is the first thing to get cut. As the economy continues to get better, those will either come back into play or grow.

“Another big part of it, too, is Generation Y in the workplace. Generation Y wants development, training and to know how they’re doing. Companies need to recognize that in order to retain top talent they have to provide these resources like mentoring, coaching and development opportunities because they want it more than some of the generations in the past.”

According to the companies that responded to the survey, roughly 75 hours of training are provided to new-hires in their first 90 days. Another way more companies are incentivizing employees to stay at their current company is through workplace flexibility.

“That has been a huge trend,” Naso says. “There has been a study that mentioned that about 78 percent of U.S. workers are looking at workplace flexibility as a primary reason why they’re either staying where they’re at or making a move. That is as important to them as compensation.”

According to the 2013 survey, 44.3 percent of companies in Northeast Ohio are offering flextime, 14.8 percent are offering compressed workweeks, 17.2 percent offer telecommuting and 32 percent offer a work-from-home option.

“It’s interesting because workplace flexibility tends to be something a little different to each person,” Naso says. “We’re seeing companies trying to put things in place that provide a variety of options for employees. It depends on the type of job or their focus and how they can create that flexibility.”

While hiring and retaining employees remains the top challenge, the upcoming ACA and its pending changes to health care costs have companies anxious about what the result will be.

“One trend we are seeing that was published recently in one of the staffing industry magazines is that temporary staffing jobs hit a record high in May as companies are trying to lighten the burden of the whole Obamacare regulation,” Naso says. “Instead of adding staff, they are using contingent labor to manage some of that.”

In fact, according to the survey, the average percentage of the workforce that was temporary of the companies polled was 3.6 percent, the highest since 2006. The percentage of contingent workers in 2013 was 8.6 percent.

“In preparation (for the ACA), a lot of companies are attending conferences and meetings,” Naso says. “However, I haven’t seen any hard and fast actions yet. I haven’t seen companies that have actually reduced their part-time staff from 35 hours to 28 hours or anything like that. They’re all in that wait and see mode.”

Due to the uncertainty of the ACA, a lot of employers and companies are being proactive.

“We’re seeing companies bringing in wellness coaches, reimbursing employees for gym memberships and bringing healthy food into their organizations via vending machines or fresh produce stands,” Rudman says.

“Biometric screening is another big one. You see a lot of those efforts happening, which down the road can hopefully impact and decline health care costs for those companies, as well as employee’s out-of-pocket costs.”

The biggest decision looming for companies is whether they will “play” or “pay” with the ACA.

“Pay means that the company is not going to offer health care and they will pay the penalty, which is $2,000 per employee, and then those employees will be a part of the health care exchange that the government is offering,” Naso says.

“Play means a company will provide a health insurance plan that meets all the new government standards. Even companies that currently offer insurance could be affected because their current plan may not meet those requirements anymore.”

One of the requirements is that health care doesn’t cost an employee more than 9.5 percent of their salary. There is also a minimum coverage.

“Companies that currently have a plan could have increased expense because they may have to pay more of the premium or increase the amount of coverage, which increases the cost of the premium,” she says. “At the moment I have heard that more companies are going to play than pay. But it’s still a huge unknown.”

Despite what may result from the ACA, there is no doubt that companies in Northeast Ohio are once again flourishing and waving goodbye to the recession. Smart Business thanks ERC and those companies that participated in this year’s Workplace Practices Survey. 

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