Shows Significant Increase in Worker Confidence About Perceived Likelihood of a Raise, Nearing Peak Levels of 2015
PHILADELPHIA, PA – September 22, 2016 – Led by a sizeable increase in the likelihood of a raise, American workers’ confidence continued its rebound into the second quarter 2016, according to the national Worker Confidence Index™, a survey of U.S. workers from HRO Today Magazine and Yoh, the leading international talent and outsourcing company owned by Day & Zimmermann. The index gauges workers’ perceptions of the four key drivers of worker confidence: the perceived likelihood of job loss, the perceived likelihood of a promotion, the perceived likelihood of a raise, and the perceived overall trust in company leadership.
Confidence levels remained relatively stable across three of four categories in the second quarter of 2016. The overall index grew to 99.7 from 96.8 in the first quarter of 2016. The largest gains came from workers’ “perceived likelihood of a raise,” growing by an unprecedented 12.2 points during the quarter.
Other changes were less significant as workers’ “perceived likelihood of job loss” remained the same, while workers’ “perceived likelihood of a promotion” and “trust in company leadership” fell and grew by small margins, respectively.
Despite the net growth in the overall index, it still lags 2015 levels, indicating some level of residual employment uncertainty and potential apprehension ahead of the upcoming presidential election.
“The spike in workers’ ‘perceived likelihood of a raise’ follows what we typically see coming out of the first quarter as many Americans begin to expect raises as fiscal years come to a close,” said Andy Roane, Vice President of Recruitment Process Outsourcing (RPO) for Yoh. “The smaller changes in expected promotion, job loss and trust in company leadership hint that while companies may be doing well financially in mid-2016, employees are still apprehensive about a full recovery, especially with the historic 2016 presidential election looming.”
Implication for HR and talent industry
“During presidential election years, employers tend to pull back on hiring until all the smoke clears,” said Roane. “While some employers can be reluctant to hire until the country's next economic direction becomes clearer, workers can often become hesitant about future prospects when policy changes could potentially affect their employment.”
What Hiring Managers Can Do Now
“This is not the time for complete inaction,” said Roane. “While, typically, election results do not significantly alter a company’s staffing needs, this is the perfect time to conduct a talent analysis to determine current workforce status, develop future needs and goals, and discover where gaps lie and how to best fill them.
“We’re seeing our clients asking more often about these types of changes in the employment market and how they can stay on top of their talent demands and scale up or down as necessary, while also building talent pools to meet future needs. Changes in employee sentiment can make it difficult to do both of these things without additional resources.”
KEY TAKEAWAYS OF THE WORKER CONFIDENCE INDEX™ INCLUDE:
- Second quarter rise in likelihood of a raise follows traditional mid-year trend
The likelihood of raise hit its highest point in the second quarter 2016 since the launch of the study – at 28.0 percent. Historically, increases in likelihood of a raise between the first and second quarters has shown some of the largest quarter-to-quarter increases of any of the four key drivers, and the most recent Index follows, growing from 24.7 percent in the first quarter to 28.0 percent in the second quarter.
- Job security has remained consistent over the past year with similar differences by race, gender and age
Over the past year, likelihood of job loss has consistently stayed between 8.4 and 8.6 percent. Women continue to report higher levels of confidence in their job security than men (6.8 percent likelihood of job loss for women and 10.5 percent for men). In general, minorities tend to anticipate job loss more than whites (12.2 percent for blacks and 14.2 percent for Hispanics versus 5.9 percent for whites). Overall, the youngest, poorest, and most educated respondents reported the highest concern about job security.
- Continued alignment with Consumer Confidence Index
Since the study began, the Worker Confidence Index has aligned with the Consumer Confidence Index, showing identical rises and falls in worker confidence ahead of similar rises and falls in consumer confidence. The Worker Confidence Index is proving to be a leading indicator of future economic health in the U.S., indicating that employees’ confidence in their employment status impacts their buying power and the overall health of the American economy. During the nearly three years of its existence, the Worker Confidence Index appears to be a more accurate predictor of economic health and U.S. spending power than unemployment rates, which have not aligned with consumer confidence.
Each month, HRO Today magazine employs ORC International's CARAVAN® Omnibus Surveys. Approximately 333 interviews are conducted online each month. Respondents are individuals age 18+ who are working full-time in the U.S. Quarterly reports are issued based on 1,000 responses per quarter. Respondents are asked a series of four questions. Each question uses a Likert-type scale where respondents rate each question on a 1-5 scale, with one being “Very poor” and 5 being “Very favorable.” The four questions asked are: Involuntary Job Loss Possibility, Likelihood of Promotion, Anticipation of a Raise of at least 3% and Trust in Company Leadership. To view the entire study, please visit, www.HROToday.com.