Future challenges Featured

11:04am EDT July 21, 2004
Employers in Northeast Ohio continue to face the same challenges they did last year -- namely recruiting and retaining qualified employees -- which was listed as the No. 1 challenge facing local businesses today.

Besides the challenges, there were also some bright spots in the survey. Business may be a bit slow right now, but survey respondents indicated the local economy may be changing for the better.

"The most prominent stat to me was the fact that only 13 percent anticipate layoffs in 2004," says Marty Mordarski, manager, workplace research, for the Employers Resource Council, which conducted the survey. "It's been as high as 30 percent in years past. I think it is a great sign that employers are being a little bit more optimistic. The average projections for base pay are up a little bit from past years, and the percentage of temporary workers is down. That may be an indication they are hiring more full-time employees."

The average percentage of employees who have been promoted over the past two years is 8.1 percent, its highest level since 2001.

"I think it is a sign that business is growing," says Mordarski. "Maybe in the past, they had hiring freezes where people didn't move to new positions. Now there may be other opportunities to move folks that have been there to new opportunities. As a result, they could potentially hire new folks to replace those positions."

Survey results show that 88 percent of the companies surveyed offer some sort of financial assistance to employees to upgrade their knowledge through training programs or degree programs. Of those that offer it, a little more than 8 percent of their HR budget is dedicated to the program.

"Businesses are making sure their work force is prepared for new opportunities," says Mordarski. "It's a retention tool. As the economy continues to grow like it seems it is, they want to be able to hang onto their best workers. These programs help do that."

Half of employers are using online job boards to find candidates, but only 32 percent have an online career center on their own Web site.

"They are missing a great opportunity to promote their organization and their brand," says Mordarski. "It's another wasted opportunity."

Employers should also use their online career centers to promote living and working in the region.

"Considering how much we hear about brain drain, why aren't employers doing more to promote the region if it is one of the biggest concerns that folks have?" says Mordarski. "It's easy to do. Showcase why someone would want to work at your organization, but also tell them it's because you're in a great region."

Companies may be challenged with finding qualified recruits, but they are not being careless about who they hire. Survey results show that 78 percent use pre-employment drug screening, up from 52 percent in 2001, and 97 percent perform reference checks, up from 89 percent in 2001.

"There is a much greater focus on making sure the right people are coming in to do the job and become part of the organization," says Mordarski.

And while recruiting and retention is the biggest challenge faced by local businesses, less than 2 percent indicated that HR was the most important position in the company.

"It's kind of an eye-opener," says Mordarski. "They are responsible for putting the recruiting and retention programs in place. Companies are not recognizing the resources they have in the HR department." How to reach: ERC, www.ercnet.org

Local workplace trends and stats

* The average minimum hourly rate has steadily increased since 2001, to $9.67 per hour.

* The average projected pay increase is 3.1 percent, its highest level since 2002.

* Only 13 percent of employers anticipate layoffs in 2004, compared to 23 percent last year.

* 30 percent of employers use some sort of psychological assessment during the selection phase.

* Controlling health care costs has moved up to rank as the second biggest challenge facing Northeast Ohio businesses, behind only recruiting and retaining qualified workers.

* 55 percent of employers offer flexible spending accounts.

* 12 percent offer health savings plans.

* 97 percent have a 401(k) or 403(b) plan for employees.

* 74 percent of companies pay cash bonuses to management, while 58 percent pay them to nonmanagement.

* Companies spend an average of 25.4 percent of their recruiting budget on classified ads, while 21.8 percent is spent on online advertisements.

* 58 percent of companies said that everyone at their company knows their mission statement.

* 16 percent of companies said they do not have a strategic plan.