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SHRM Survey Findings: The Ongoing Impact of the Recession—California Financial Health and Hiring
April 18, 2013
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 2
• This is part one (financial health and hiring) of the California results from a series of SHRM survey findings about the ongoing impact of the U.S. and global recession, which began in 2007. California and U.S. results are compared, and statistically significant differences are indicated with an asterisk (*).
• Part one results (financial health and hiring) includes the following sections: Organizations’ financial health. Hiring. Creating completely new positions. Demographics.
• Part two results (recruiting and skill gaps) includes the following sections: Recruiting challenges. Skill gaps. Recruiting strategies. The Impact of strategic technological changes. Demographics.
• Overall and industry-specific results can be found on our website at www.shrm.org/surveys.
Introduction
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 3
Organizations’ Financial Health
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 4
• What percentage of staff have organizations lost since the U.S. and global recession began in December 2007? About one-quarter (24%) of organizations indicated they had not lost any employees since the recession began, and 29% lost up to 5% of staff.
• What percentage of staff have organizations lost in the last 12 months? Slightly less than one-half (46%) of organizations have not lost any staff in the past year, and one-third (34%) reported losing up to 5% of employees.
• How does the financial health of organizations compare to 12 months ago? Over one-half (54%) of organizations reported a mild to significant improvement; 17% reported no change; and 29% were in a mild or significant decline.
Key Findings: Organizations’ Financial HealthCalifornia
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 5
• HR professionals in organizations that experienced layoffs will need to consider the impact on remaining employees. With 29% of organizations reporting that they lost up to 5% of staff during the recession and one-third (34%) reporting losing up to 5% of employees in the last 12 months, workload issues and burnout could be a potential problem. Economic conditions that continue to improve could lead to increased turnover.
• The improved financial health of organizations in California could mean that competition for talented employees is likely to begin heating up—if it has not already. With over one-half (54%) of organizations reporting mild to significant improvement in their financial health, employees may begin to feel more confident about new seeking opportunities. With unemployment rates for college graduates relatively low overall, competition for the most educated, skilled or experienced workers could start to become more intense.
• Improved financial health could enable more organizations to increase their training and education benefits. Many organizations put off investing in training during tough economic times. As more organizations find their financial footing, an increase in investments in training and development could follow, especially if finding job candidates to fill some jobs proves so challenging that organizations become more focused on growing talent from within.
Implications for HR: Organizations’ Financial HealthCalifornia
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 6
*More than 50% of staff
21% to 50% of staff
11% to 20% of staff
6% to 10% of staff
1% to 5% of staff
*0% of staff
2%
8%
13%
18%
29%
29%
5%
9%
15%
17%
29%
24%
California(n = 452)
United States(n = 3,236)
Since the U.S. and global recession began in December 2007, what percentage of full-time regular jobs at your organization has been lost (e.g., due to layoffs, attrition)? California
Note: Percentages do not total 100% due to rounding. An asterisk (*) indicates a statistically significant difference between organizations in California compared with those in the United States.
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 7
Since the U.S. and global recession began in December 2007, what percentage of full-time regular jobs at your organization has been lost (e.g., due to layoffs, attrition)? California
Note: Only statistically significant differences are shown.
Comparisons by organization sector:Percentage of organizations that lost 0% of staff
Privately owned for-profit (31%) > Publicly owned for-profit (5%)
Comparisons by organization sector
• Privately owned for-profit organizations are more likely than publicly owned for-profit organizations to have NOT encountered staff losses (lost 0% of staff) since the U.S. and global recession began in December 2007.
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 8
In the last 12 months, from August 1, 2011, to July 31, 2012, what percentage of full-time regular jobs at your organization has been lost (e.g., due to layoffs, attrition)? California
Note: An asterisk (*) indicates a statistically significant difference between organizations in California compared those in with the United States.
0% of staff
1% to 5% of staff
6% to 10% of staff
*11% to 20% of staff
21% to 50% of staff
More than 50% of staff
46%
34%
10%
7%
2%
1%
49%
33%
10%
5%
2%
1%
United States(n = 3,277)California(n = 456)
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 9
In the last 12 months, from August 1, 2011, to July 31, 2012, what percentage of full-time regular jobs at your organization has been lost (e.g., due to layoffs, attrition)? California
Note: Only statistically significant differences are shown.
Comparisons by organization staff size:Percentage of organizations that lost 0% of staff
1 to 99 employees (59%) >2,500 to 24,999 employees (27%)25,000 or more employees (16%)
Comparisons by organization staff size
• Organizations with 1 to 99 employees are more likely than organizations with 2,500 or more employees to have NOT encountered staff losses (lost 0% of staff) in the last 12 months.
Comparisons by organization sector:Percentage of organizations that lost 0% of staff
Privately owned for-profit (49%)
Nonprofit (46%)> Publicly owned for-profit (17%)
• Privately owned for-profit and nonprofit organizations are more likely than publicly owned for-profit organizations to have NOT encountered staff losses (lost 0% of staff) in the last 12 months.
Comparisons by organization sector
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 10
Compared to 12 months ago, would you say your organization's overall financial health is improving, has not changed or is declining? California
Significant decline
Mild decline
*No change
Mild improvement
Significant improvement
7%
20%
22%
38%
13%
8%
21%
17%
41%
13%
California(n = 472)
United States(n = 3,362)
Note: An asterisk (*) indicates a statistically significant difference between organizations in California compared with those in the United States.
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 11
Compared to 12 months ago, would you say your organization's overall financial health is improving, has not changed or is declining? California
Note: Only statistically significant differences are shown.
Comparisons by organization sector:Significant decline
Government (21%) > Privately owned for-profit (4%)
Comparisons by organization sector
• Government organizations are more likely than privately owned for-profit organizations to be in a significant decline compared to 12 months ago.
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 12
Hiring
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 13
• Are organizations currently hiring? About three-quarters (76%) of organizations reported hiring full-time employees, and one-third (34%) part-time employees. For temporary/contract positions, 39% of organizations are hiring full-time employees, and 30% part-time employees.
• For what types of positions are organizations hiring? Most organizations are hiring at nonmanagement levels (70% for hourly and 64% for salaried positions), and approximately one-half (51%) reported hiring for management positions such as directors and managers. One-quarter of organizations (25%) are hiring at the executive/upper-management (e.g., CEO, CFO) level.
Key Findings: HiringCalifornia
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 14
• An uptick in hiring could influence recruiting difficulty and eventually new-hire compensation. With three-quarters (76%) of organizations reporting hiring full-time employees, and one-third (34%) part-time employees, a more robust labor market is developing. Though this change is a welcome development for California’s economy, with a smaller pool of unemployed job seekers and more opportunities to move for those currently in jobs, staffing for some roles could grow more challenging. Eventually this could lead to increases in compensation packages offered to some new-hires.
• Use of contract and temporary workers will continue to be an option. Some organizations will put off hiring employees until economic conditions further stabilize. For these organizations, hiring temporary or contract workers may be the strategy they focus on in the next several years.
• HR professionals will need to work with hiring managers to set realistic expectations for filling some jobs. Hiring managers may have become acclimated to a “buyers market” economic environment where filling many jobs was relatively easy. But with improved labor market conditions this may no longer be the case, especially for jobs requiring in-demand education, credentials, skills or experience. In these situations, HR professionals will need to work with hiring managers to set reasonable expectations for how long it will take to fill some jobs and to develop competitive compensation packages.
Implications for HR: HiringCalifornia
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 15
Is your organization currently hiring for any of the following types of staff? California
Note: Percentages do not total 100% due to multiple response options.
Part-time contract/temporary
Full-time contract/temporary
Part-time
Full-time
26%
37%
38%
78%
30%
39%
34%
76%
California(n = 489)
United States(n = 3,480-3,481)
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 16
Is your organization currently hiring full-time or part-time staff?California
Note: Only statistically significant differences are shown.
Comparisons by organization staff size
• Organizations with 100 to 2,499 employees are more likely than organizations with 1 to 99 employees to be currently hiring full-time staff.
Comparisons by organization staff size: Full-time staff
100 to 499 employees (80%)500 to 2,499 employees (91%) > 1 to 99 employees (60%)
• Organizations with 500 to 2,499 or 25,000 or more employees are more likely than organizations with 1 to 499 employees to be currently hiring part-time staff.
• Organizations with 2,500 to 24,999 employees are more likely than organizations with 1 to 99 employees to be currently hiring part-time staff.
Comparisons by organization staff size: Part-time staff
500 to 2,499 employees (56%)25,000 or more employees (71%) >
1 to 99 employees (17%)100 to 499 employees (27%)
2,500 to 24,999 employees (48%) > 1 to 99 employees (17%)
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 17
Is your organization currently hiring full-time or part-time contract/temporary staff? California
Note: Only statistically significant differences are shown.
Comparisons by organization staff size• Organizations with 500 or more employees are more likely than organizations with 1 to 99 employees to be
currently hiring full-time contract/temporary staff.
Comparisons by organization staff size: Full-time contract/temporary staff
500 to 2,499 employees (59%)2,500 to 24,999 employees (52%)25,000 or more employees (54%)
> 1 to 99 employees (22%)
Comparisons by organization sector: Full-time contract/temporary staff
Publicly owned for-profit (57%) > Privately owned for-profit (32%)
Comparisons by organization sector
• Publicly owned for-profit organizations are more likely than privately owned for-profit organizations to be currently hiring full-time contract/temporary staff.
Comparisons by organization sector: Part-time contract/temporary staff
Government (69%) > Privately owned for-profit (21%)
• Government organizations are more likely than privately owned for-profit organizations to be currently hiring part-time contract/temporary staff.
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 18
At what level(s) is your organization hiring?California
Note: Only respondents whose organizations were currently hiring full-time regular staff were asked this question. An asterisk (*) indicates a statistically significant difference between organizations in California compared with those in the United States.
*Executive/upper management(e.g., CEO, CFO)
Management(e.g., directors, managers)
*Nonmanagementsalaried employees
Nonmanagementhourly employees
20%
49%
70%
71%
25%
51%
64%
70%
California(n = 371)
United States(n = 2,722)
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 19
Is your organization currently hiring nonmanagement hourly or management (e.g., directors, managers) employees? California
Note: Only statistically significant differences are shown.
Comparisons by organization staff size
• Organizations with 100 to 499 and 2,500 or more employees are more likely than organizations with 1 to 99 employees to be currently hiring nonmanagement hourly employees.
Comparisons by organization staff size: Nonmanagement hourly
100 to 499 employees (82%)2,500 to 24,999 employees (83%)25,000 or more employees (90%)
> 1 to 99 employees (42%)
• Organizations with 2,500 to 24,999 employees are more likely than organizations with 1 to 99 employees to be currently hiring management-level employees.
Comparisons by organization staff size: Management
2,500 to 24,999 employees (71%) > 1 to 99 employees (27%)
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 20
Creating Completely New Positions
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 21
• Are organizations creating new positions or replacing jobs lost? Of those organizations hiring, approximately one-half (51%) primarily hired direct replacements of jobs lost, whereas 38% hired for completely new positions. About one in 10 (11%) organizations added new duties to the jobs lost.
California (38%) is more likely than the U.S. (31%) to be hiring for completely new positions, and the U.S. is more likely to be hiring direct replacements (57% versus 51%).
• Do the completely new positions hired require new and different skill sets? Compared with the skills required for the jobs lost since the recession
began: Most (70%) organizations required a mixture of new skills and the same types
of skills for new positions. One in five (20%) required completely new and different skill sets, and 10% required approximately the same types of skills.
California (70%) is more likely than the U.S. (58%) to require a mix of new and the same skills for new positions, whereas the U.S. is more likely to be requiring approximately the same types of skills (23% versus 10%).
Compared with the skills required in existing jobs (for organizations that had not lost any jobs since the recession began):
Three in five (60%) organizations required a mixture of new skills and the same types of skills. Thirty-one percent required approximately the same types of skills. Few organizations (9%) required completely new and different skills.
Key Findings: Creating Completely New PositionsCalifornia
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 22
• For California, as for most parts of the U.S., the focus in the coming decade is likely to be on replacement job fillings. In the coming years, HR professionals are likely to be staffing for replacement needs more than filling newly created positions. According to the U.S. Bureau of Labor Statistics’ (BLS) 2010-2020 Employment Project Report, slower population growth will lead to a decreasing overall labor force from 2010 to 2020. It projects 54.8 million total job openings in this time period with more than half—61.6%—resulting from “replacement needs,” i.e., the need to replace workers who retire or otherwise permanently leave an occupation. Replacement needs will exceed new job growth vacancies in four out of five occupations. Of those California organizations hiring, approximately one-half (51%) primarily hired direct replacements of jobs lost.
• Staffing for replacement needs of jobs exited by retiring Baby Boomers may create an even bigger staffing challenge in the years ahead. The retirement of the Baby Boomer generation will add to replacement needs hiring. For many jobs requiring high levels of education, this change could result in recruiting difficulty.
• If replacement needs hiring proves increasingly challenging, California HR professionals may need to convince their hiring managers that staffing for some jobs will be more difficult than expected. This is particularly true of STEM jobs such as engineering, science and tech jobs. HR professionals may need to work with their organizational leaders to come up with more effective recruitment strategies for hard-to-fill jobs.
• Jobs requiring new skills may require more organizational investment in training and development. Though most new job openings may be due to replacement needs, many organizations in California are hiring for completely new positions (38%) or adding new duties to jobs that were in place pre-recession (11%). Getting new-hires up-to-speed with the needed skills may require an investment in training and development. A greater reliance on new entrants to the labor force to replace retiring Baby Boomers could also emphasize the need to invest in training and development programs.
Implications for HR: Creating Completely New PositionsCalifornia
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 23
Which of the following best describes, in general, the nature of full-time positions for which your organization is currently hiring?California
Note: Percentages may not total 100% due to rounding. Only respondents whose organizations were currently hiring full-time regular staff were asked this question. An asterisk (*) indicates a statistically significant difference between organizations in California compared with those in the United States.
New duties added to jobs lost (e.g., due to layoffs, attrition) since the
recession began
*Completely new positions
*Direct replacements of jobs lost (e.g., due to layoffs, attrition) since
the recession began
11%
31%
57%
11%
38%
51%
California(n = 365)
United States(n = 2,665)
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 24
Which of the following best describes, in general, the nature of full-time positions for which your organization is currently hiring?California
Note: Only statistically significant differences are shown.
Comparisons by organization sector: Direct replacements of jobs lost
Government (83%) > Nonprofit (37%)
Comparisons by organization sector
• Government organizations are more likely than nonprofit organizations to be currently hiring direct replacements of jobs lost (e.g., due to layoffs, attrition) since the recession began.
Comparisons by organization sector: New duties added to jobs lost
Nonprofit (22%) > Privately owned for-profit (3%)
• Nonprofit organizations are more likely than privately owned for-profit organizations to be currently hiring for new duties added to jobs lost (e.g., due to layoffs, attrition) since the recession began.
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 25
Compared with the skills required for jobs lost (e.g., due to layoffs, attrition) since the recession began in December 2007, do these completely new full-time positions require: California
Note: Only respondents whose organizations had lost jobs since the recession began in December 2007 and were hiring full-time staff for “completely new positions” were asked this question. An asterisk (*) indicates a statistically significant difference between organizations in California compared with those in the United States.
*Approximately thesame types of skills
Completely new anddifferent skills
*A mixture of new skills andthe same types of skills
23%
19%
58%
10%
20%
70%
California(n = 83)
United States(n = 391)
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 26
Compared with the skills required in existing jobs in your organization, do these completely new full-time regular positions require: California
Note: Percentages may not total 100% due to rounding. Only respondents whose organizations had not lost jobs since the recession began in December 2007 and were hiring full-time staff for “completely new positions” were asked this question.
Completely new anddifferent skills
Approximately thesame types of skills
A mixture of new skills andthe same types of skills
5%
42%
54%
9%
31%
60%
California(n = 55)United States(n = 437)
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 27
Demographics
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 28
Demographics: Organization IndustryCalifornia
Note: Percentages may not total 100% due to rounding.
Professional services
Health
Manufacturing
State or local government
Finance
High-tech
Construction, mining, oil and gas
Federal government
Other
22%
13%
11%
9%
8%
8%
5%
2%
22%
13%
13%
14%
20%
11%
7%
10%
7%
6%
United States(n = 3,481)
California(n = 489)
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 29
Demographics: Organization SectorCalifornia
Note: Percentages may not total 100% due to rounding.
Privately owned for-profit
Publicly owned for-profit
Nonprofit
Government
Other
48%
19%
17%
12%
3%
43%
17%
12%
25%
3%
United States(n = 3,294)
California(n = 473)
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 30
Demographics: Organization Staff SizeCalifornia
1 to 99 employees
100 to 499 employees
500 to 2,499 employees
2,500 to 24,999 employees
25,000 or more employees
30%
32%
16%
14%
8%
26%
33%
19%
16%
6%
United States(n = 3,208)
California(n = 460)
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 31
CA U.S.
U.S.-based operations only
74% 76%
Multinational operations
26% 24%
n = 476 (CA), 3,311 (U.S.)
Other DemographicsCalifornia
CA U.S.
Single-unit organization: An organization in which the location and the organization are one and the same.
34% 36%
Multi-unit organization: An organization that has more than one location.
66% 64%
CA U.S.
Multi-unit headquarters determines HR policies and practices
46% 50%
Each work location determines HR policies and practices
4% 3%
A combination of both the work location and the multi-unit headquarters determines HR policies and practices
50% 47%
Is your organization a single-unit organization or a multi-unit organization?
For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or by both?
Does your organization have U.S.-based operations (business units) only, or does it operate multinationally?
n = 478 (CA), 3,325 (U.S.)
n = 327 (CA), 2,204 (U.S.)
CA U.S.
Corporate (companywide)
65% 68%
Business unit/division 22% 19%
Facility/location 13% 13%
n = 328 (CA), 2,206 (U.S.)
What is the HR department/function for which you responded throughout this survey?
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 32
• California response rate = 10%
• United States response rate = 15%
• 491(California) and 3,481 (United States) HR professionals from a randomly selected sample of SHRM’s membership participated in this survey
• Margin of error: California +/-4%, United States +/-2%
• Survey fielded August 28 through September 14, 2012
SHRM Survey Findings: The Ongoing Impact of the Recession—California Financial Health and Hiring
Survey Methodology
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 33
• For more survey/poll findings, visit www.shrm.org/surveys
• For more information about SHRM’s Customized Research Services, visit www.shrm.org/customizedresearch
• Follow us on Twitter @SHRM_Research
About SHRM Research
Project leader:Tanya Mulvey, survey research analyst, SHRM Research
Project contributors:Alexander Alonso, Ph.D., SPHR, vice president, SHRM ResearchEvren Esen, manager, Survey Research Center, SHRM ResearchJennifer Schramm, GPHR, manager, Workplace Trends and Forecasting,
SHRM Research
Copy editor:Katya Scanlan, SHRM Knowledge Center