While many changes have been positive for middle market firms, they are grappling with challenges related to a tight labor market. Fifty-six percent of surveyed companies plan to ramp up hiring during the next year, and of these, more than 90 percent admit it will be at least somewhat challenging to staff their open positions. The outlook on retention is similar, with 85 percent of executives stating staff turnover will be a challenge. A lack of available qualified workers was cited as a reason to anticipate staffing issues by 96 percent of companies, including 43 percent that declared it to be a major issue. Even more companies said local competition for workers was a main reason for their hiring difficulties, while slightly fewer companies indicated the competition for workers with other employers in their industry was a factor. Other responses included issues finding people who want to work in their industry and the cost of labor. “The employment landscape in America has changed dramatically as a result of the COVID-19 pandemic, and we now have a situation where there are too many people without jobs, and there are too many jobs without people to fill them,” said Neil Bradley, executive vice president and chief policy officer of the U.S. Chamber of Commerce. “In this tight labor market companies that adapt their workforce practices for more flexibility, invest in training and upskilling opportunities, and seek out workers from overlooked talent pools will be better positioned to compete for talent in the post-pandemic economy.” Almost half (49 percent) of the surveyed executives said they are sourcing talent for work that can be done remotely from a broader geographical area than before COVID-19. This is especially true for larger middle market companies ($50 million to $1 billion in annual revenue), with 59 percent stating they are expanding their talent pool to workers who may not be in the same city, or even the same time zone, as their bosses. To recruit and retain people, 59 percent of middle market companies that believe staffing open positions will be extremely, very or somewhat challenging said they plan to increase compensation, and 48 percent of these companies intend to enhance their benefits. These findings seem to indicate that many organizations are still trying to attract people with the traditional offers of better pay and benefits. “And in a bright spot on the labor front,” said RSM researchers, “nearly two-thirds of executives polled said they don’t expect challenges around turnover in the next year.” To foster retention, in addition to embracing remote work, 47 percent of the companies polled offer employee recognition, flexible hours, health care benefits and retirement programs. The Future of Work Working toward transitioning from a pandemic to endemic environment, middle market companies are considering the areas in which they want to invest during the next year. For example, 66 percent of respondents plan to invest in new skills training for their existing employees. At the same time, companies will need to balance the well-being of their employees and clients with the limitations of their office spaces while adhering to federal or state laws. The shift to remote work does seem to indicate a looming reduction in office space, as more than a third of respondents are reducing their physical offices and other workspaces – at least in the near term – “and may be benefitting from reduced overhead as a result.” Make no mistake, companies that don’t offer remote or hybrid work will face a disadvantage in recruiting and retaining talent, concluded to the report. The survey data show the future of work includes new systems and technology for increasing worker efficiency, as well as improving cybersecurity. Of the companies that said staffing open positions is at least somewhat challenging, 59 percent are planning or considering investing in automation or information technology, and 73 percent of those said their goal is to increase employee productivity. The survey findings imply these companies are not looking to reduce staff, rather, they’re aiming to improve job satisfaction by reducing administrative and repetitive tasks. The survey data that informs this index reading was gathered between October 4-21, 2021. The RSM US Middle Market Business Index (MMBI) is based on research of middle market firms conducted by Harris Poll. The survey is conducted four times a year, in the first month of each quarter: January, April, July and October. The survey panel consists of 700 middle market executives and is designed to reflect conditions in the middle market. J 17 REMOTE WORK SOLUTIONS rwsmagazine.com
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