Benefits June 14, 2011

Survey Finds Positive Hiring Intentions Among U.S. Employers

June 14, 2011(PLANSPONSOR.com) - According to the latest Manpower Employment Outlook Survey, the percentage of employers planning to add staff is at its highest level since the 2008 fourth quarter.
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The survey from ManpowerGroup found that positive yet careful hiring intentions are expected to persist in the U.S. throughout the summer. The net employment outlook for the third quarter of 2011 is +8%, up from +6% during the same period last year and consistent with the +8% outlook during the second quarter.

This quarter’s survey indicates the following trends: 

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  • 2011 gains holding steady: Since the first quarter of 2011, when the net employment outlook jumped to +8% from +5% the previous quarter, hiring expectations have remained consistent; 
  • Positive hiring intentions across U.S.: Employers in all fifty states report positive hiring intentions and 42 out of 50 states anticipate considerable increases in the typically strong third quarter; 
  • Seven straight quarters of employment growth: Since the 2010 first quarter, employers have reported a positive overall hiring outlook in each survey; and 
  • Many sectors gaining momentum: Employers in nine of thirteen industries surveyed nationally report the strongest overall outlook within their sectors since first quarter 2009.  

“Although employers are not signaling dramatic upswings in hiring plans, there does seem to be hiring energy developing based on sustained year-over-year growth,” said Jonas Prising, ManpowerGroup president of the Americas. “This is also the eleventh consecutive quarter with a single-digit net employment outlook, indicating a level of caution not seen among employers in the last 30 years of data.” 

Of the more than 18,000 employers surveyed:  

  • 20% anticipate an increase in staff levels in their Quarter 3 2011 hiring plans; 
  • 8% expect a decrease in payrolls; 
  • 69% of employers expect no change in their hiring plans; and 
  • 3% of employers indicate they are undecided about their hiring intentions.  

The Manpower Net Employment Outlook is determined by taking the percentage of employers anticipating an increase in hiring activity (20%) and subtracting from this the percentage of employers expecting a decrease in hiring activity (8%); this result is then seasonally adjusted, giving the current +8%. 

"Our data shows that one in five employers plan to add staff in the next three months, the highest ratio we've seen since the recovery started," said Prising. "As more employers shift to hiring mode, we are starting to see talented job seekers receive multiple employment offers, and also negotiate for higher salaries.… Employers may want to hire, but they will struggle to find the right person, in the right place, which will bring a level of urgency to developing new recruiting and training strategies." 

Employers in 11 of the 13 industry sectors surveyed have a positive outlook for Quarter 3 2011:  

  • Leisure & Hospitality (+27%); 
  • Mining (+25%); 
  • Wholesale & Retail Trade (+20%); 
  • Professional & Business Services (+19%); 
  • Durable Goods Manufacturing (+17%); 
  • Nondurable Goods Manufacturing (+16%); 
  • Transportation & Utilities (+14%); 
  • Construction (+11%); 
  • Information (+11); 
  • Financial Activities (+11%);  
  • and Other Services (+7%).  

 Employers in two industry sectors have a slightly negative outlook:  Government (-1%) and Education & Health Services (-2%).  

The Manpower Employment Outlook Survey is conducted by an independent, third-party research firm and includes a select sample of more than 18,000 U.S. employers, which represents the top 100 Metropolitan Statistical Areas based on business establishment count and all 50 states, the District of Columbia and Puerto Rico.  

The complete results from the U.S. National Manpower Employment Outlook Survey are available here. 

-Sara Kelly

Benefits June 14, 2011

Employers Feel Responsible for Benefits and Advice

June 14, 2011 (PLANSPONSOR.com) - A Bank of America Merrill Lynch study found 53% of employers feel responsible for providing financial vehicles, as well as education and advice, to help their employees have a secure retirement.
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The Workplace Benefits Report from Bank of America Merrill Lynch examined the role of financial benefit plans in employers’ talent management strategies and in the overall financial well-being of their employees.  

Retaining and Attracting Talent   

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The importance of retaining and attracting quality employees was at the forefront of most employers’ minds; 94% of employers said it’s important to retain older employees and 98% said it’s important to attract new employees.    

BofA Merrill Lynch asked employers why older employees are valuable. Reasons given included their institutional knowledge, sharpened skill set, ability to train new employees, and their relationships with clients. In order to keep these employees at work longer, employers are offering a broader range of benefits than in the past, including flexible or customized work schedules (50%), education around retirement income and health care topics (33%), continuing education and development opportunities (32%), and the opportunity to work remotely (22%).   

“Longer life expectancies and Baby Boomers’ desire or need to keep working is leading to an aging population of American employees that will require more age-friendly workplaces and benefit plans designed to meet the unique needs of multiple generations,” said Andy Sieg, head of Retirement Services for Bank of America Merrill Lynch. “HR leaders are playing more strategic roles within organizations seeking to harness the experience and intellectual capital of older employees in order to remain competitive.”  

Attracting new, younger talent also requires various benefit offerings, but the priorities shift slightly. Employers said health care benefits are most important for attracting new talent (69%), followed by retirement benefits (59%), having a good manager (31%), and flex time (28%).

Employees’ Financial Well-Being  

BofA Merrill Lynch found that since the recession, employers are feeling an increased sense of responsibility towards their employees’ financial future. Fifty-nine percent of employers feel an increased sense of responsibility for helping employees meet their financial goals. More than half (53%) feel this responsibility includes providing financial benefit plans, as well as access to financial education and advice.  

When asked why they offer financial benefit plans, nearly seven out of 10 (68%) employers cited doing so out of concern for their employees’ financial well-being and 64% said that doing so was part of their company’s core values. Remaining competitive (39%) and helping employees be more productive (39%) are also among the top reasons.  

Employers also reported seeing a number of behavioral shifts in terms of how current employees are engaging with their retirement benefit plans. Since the economic crisis:   

  • Fifty-eight percent of employers find that employees approaching retirement are taking a more active, hands-on approach to their financial benefit plans; 
  • Thirty-six percent find that younger employees are enrolling earlier into financial benefit plans; 
  • Twenty-six percent find that employees are contributing enough to receive their full company match at an earlier age; and 
  • Nineteen percent find that employees are maxing out contributions at an earlier age. 

  

Given the uncertain future of Social Security, and with employers moving away from traditional pension plans, employees may become increasingly reliant on defined contribution plans, such as a 401(k) plan, BofA Merrill Lynch noted. Assuming this trend continues, most employers (75%) anticipate that a greater number of employees will enroll in 401(k) plans or increase their contribution rates. Employers also anticipate increased demand for access to 401(k) saving and investment advice (79%), and that older employees will work longer to extend the benefits of these plans (84%).  

Employers are prepared to act on these growing demands, the survey found. When asked whether they plan to enhance the various financial benefit plans they offer during the next two years, many employers said that they are likely to enhance their: 

  • Defined contribution plans (78%), 
  • Flexible savings accounts (74%), 
  • Health savings accounts (72%), 
  • Non-qualified deferred compensation plans (58%), 
  • Defined benefit plans (47%), and 
  • Equity plans (39%). 

The Role of Advice   

Six in 10 employers are offering access to advice and services that help employees prepare for retirement, according to the Workplace Benefits Report. There is also more education regarding how to pay for health care (51%), understanding investments (41%), using stock options or an equity plan (27%), monitoring progress toward meeting financial goals (27%), and managing day-to-day budgeting and spending (17%).   

Some employers are even offering tools to assist employees with managing their personal finances with access to: 

  • Relevant research or literature to help inform their investment decisions (45%), 
  • A one-on-one relationship with a financial adviser (39%), 
  • Intuitive online tools to help them manage their banking and investing (38%), and 
  • Financial seminars relevant to their life stage (34%). 

 

Frustratingly, employers told BofA that employees are not taking full advantage of these resources. Fifty-nine percent of employers find that less than half of their employees take advantage of the financial education and advice made available to them. When asked why their workforce fails to take advantage of these resources, 54% of employers believe their employees do not view it as relevant to them, or that employees perceive the whole process as too complicated. Forty-six percent believe that their employees may simply be too busy and 23% may not know these resources exist.  

When asked how frequently they communicate the broader value of their financial benefit plans to employees, 86% of companies cited doing so just twice annually or less frequently, and 61% provide only basic information about financial benefits when they do communicate. Nearly one-third (31%) of employers admit they could do a better job of communicating the broader value of these offerings to their employees.   

BofA Merrill Lynch interviewed 650 C-level executives from April 19-23, 2011. All respondents met the following criteria: 1) offer their employees at least one type of financial benefit plan, 2) total revenue of the business in 2010 was between $5 million and $2 billion, and 3) must have at least 100 employees. 

 

-Nicole Bliman

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