shrm economic-conditions-financial-health-hiring-ca

SHRM Survey Findings: 2014 Economic Conditions—

California Overall Financial Health and Hiring

October 30, 2014

• This is Part 1 of the California results from a series of SHRM survey results about the state of jobs

and skills in the current economic condition, which relates to a SHRM survey series about the

ongoing impact of the U.S. and global recession from 2007 to 2012. California and U.S. results are

compared, and statistically significant differences are indicated in separate slides in the report.

• California results will be reported separately in three different topic areas:

» Overall financial health and hiring.

» Recruiting and skills gaps.

» Global competition and hiring strategies.

• Overall results (including industry-specific information) for 2013 can be found on our website at

http://www.shrm.org/research/surveyfindings/articles/pages/shrmpolltheongoingimpactoftherecessio

n.aspx

Economic Conditions—California Overall Financial Health and Hiring ©SHRM 2014 2

Introduction

http://www.shrm.org/research/surveyfindings/articles/pages/shrmpolltheongoingimpactoftherecession.aspx

• How is the financial health of California organizations? The majority of organizations in California

are doing well—one-quarter (26%) reported excellent financial health, and one-half (49%) indicated their

organization was in good financial health. Just 6% said their organization was doing poor financially.

» Over the past 12 months, three-fifths of California organizations had seen mild (45%) to significant

(15%) improvement in their financial health.

• Have California organizations been losing staff due to layoffs, attrition, restructuring, etc.? Over

the past year, only 5% of California organizations had lost 21% or more of their employees. Two-fifths

(40%) of organizations had lost 1% to 5% of staff, and one-quarter (26%) reported no staff losses.

• Regardless of the status of their current financial health, what actions have California

organizations taken as a result of financial challenges? Nearly two in five organizations (38%) had

not implemented any changes in the past year. For those that did, the most common strategies were to

lay off employees (32%), implement budget cuts (26%) and freeze hiring (21%).

» Organizations in California (32%) were more likely to lay off employees as a result of financial

challenges compared with the rest of the U.S. (25%).

• Regardless of the status of their current financial health, what actions have California

organizations taken as a result of financial stability or growth? One-third of California organizations

(34%) did not take any actions, but for the two-thirds that did, the most common actions were to increase

salaries (37%), provide bonuses (30%) and fill positions that had been lost (26%).


Key Findings

• Are organizations in California hiring? The vast majority of California organizations (95%) had hired

full-time employees in the past year, and two-thirds (67%) had hired contract/temporary workers on a

full-time basis. For part-time work, 61% had hired regular employees, whereas about one-half (52%)

had hired contract/temporary workers.

» California organizations were less likely to hire part-time employees compared with the rest of

the U.S.

• Which factors are important when considering whether to hire full-time staff? When given the

four following factors, California organizations indicated that maintaining normal business operations

(76% extremely or very important) was the most important factor, followed by organizational growth

(69%), changes in business strategy (63%) and an improved economy (34%). These results were

similar for the rest of the U.S.

• Are California organizations creating new positions or adding new duties to existing jobs? Over

the past year, California organizations were most likely to have hired direct replacements (79%), but

three in five (62%) had hired for completely new positions, with 45% indicating they had hired

replacements that required new duties.

» Additionally, two-thirds of California organizations (67%) indicated that hiring for completely new

positions had increased over the past year, and hiring replacements with new duties had

increased for 47% of organizations. California was more likely than the rest of the U.S. to have

had an increase in hiring for replacements (32% and 25%, respectively).Economic Conditions—California Overall Financial Health and Hiring ©SHRM 2014 4

Key Findings (continued)

• Are California organizations requiring new skills for full-time regular positions? One-half

(50%) of organizations in California indicated that new skills—either for the position or for the

organization—were required for at least some of the full-time positions they had hired in the past

year.

• Why are new skills required for some positions? The top three reasons were due to changes in

the organization or its operations: growth (56%), new products/services (43%) and expanding

business into new markets (41%). Two in five organizations (41%) also cited changing technology

as a reason for requiring new skills. However, organizations in the rest of the U.S. (51%) were more

likely to require new skills because of changing technology compared with California.

• How difficult is it to find qualified candidates for positions requiring new skills? About two-

thirds of California organizations said it was very (15%) or somewhat (53%) difficult to find qualified

individuals for full-time regular positions requiring new skills in the past year.

• What are the most common job categories for which California organizations are hiring?

Similar to the U.S. overall findings, around one-half of California organizations had hired

administrative support staff (58%), accounting and finance professionals (52%), and managers and

executives (50%) in the past year. Over one-third had hired IT/computer specialists (39%),

customer service representatives (34%) and HR professionals (34%). The rest of the U.S. was

more likely than California to have hired hourly laborers (30% versus 24%) and skilled trade

positions (24% versus 18%) in the past year.Economic Conditions—California Overall Financial Health and Hiring ©SHRM 2014 5

Key Findings (continued)

• After a lengthy recession that saw the loss of more than eight million jobs, the U.S. economy is

clearly in recovery, albeit in a tempered period of growth. Three out of four respondents to the

California survey, as well as 80% in the U.S. overall, reported that their organization is either in

“excellent” or “good” financial health, an extremely positive indicator for the economy’s current

expansion.

• Despite improved conditions, many employers and sectors of the economy are still struggling.

Certain industries, such as high-tech, are seeing increased demand for their services, whereas

others—particularly government entities—continue to face budget deficits. And though hiring has

improved in the U.S. labor market overall, some employers have still been forced to cut staff to

make ends meet. One quarter of overall U.S. organizations laid off workers in response to financial

difficulties during the past 12 months, and that action was taken at a slightly higher rate among

California organizations (32%).

• Despite recent job gains, millions of positions are still going unfilled and, consequently, impeding

the growth of some employers. In July 2014, there were 4.7 million job openings in the United

States, up nearly 800,000 from the beginning of 2014, according to federal data. With millions of

people seeking work, it is clear that many jobs are not being filled due to a skills mismatch between

job seekers and open positions. Two-thirds of respondents to the California and overall U.S.

surveys indicated that they were having some level of difficulty hiring for their full-time openings.


What Do These Findings Mean for the HR Profession?

Organizations’ Overall Financial Health


Note: Respondents who answered "don't know" were excluded from this analysis.

30%

26%

50%

49%

16%

19%

4%

6%

United States(n = 3,255)

California(n = 564)

Excellent Good Fair Poor

Organizations’ Change in Overall Financial Health

Compared to 12 Months Ago


Note: Respondents who answered "don't know" were excluded from this analysis.

13%

15%

44%

45%

22%

19%

17%

17%

4%

4%

United States(n = 3,140)

California(n = 549)

Significantimprovement

Mildimprovement

No change Milddecline

Significantdecline

Organizations’ Loss of Regular Full-time Workforce in the

Last 12 Months due to Layoffs, Attrition, Restructuring, etc.


Note: Respondents who answered "don't know" were excluded from this analysis. Percentages do not equal 100% due to rounding.

31%

26%

40%

40%

16%

16%

9%

12%

4%

4%

1%

1%

United States (n =3,141)

California (n = 549)

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

Actions Organizations Have Taken as a Result of

Financial Challenges in the Last 12 Months


Note: Respondents who answered "don't know" were excluded from this analysis. Percentages do not equal 100% due to multiple response options.

38%

32%

26%

21%

17%

17%

15%

12%

10%

5%

5%

3%

3%

40%

25%

27%

19%

15%

13%

16%

11%

11%

6%

3%

4%

4%

None

Laid off employees

Implemented budget cuts

Had a hiring freeze

Frozen/reduced salaries, raises or bonuses

Cut temporary staff

Eliminated or reduced overtime

Reduced benefits or increased employee contribution

Reduced employee hours

Offered early retirement or retirement incentive

Furloughed employees, unrelated to the government shutdown

Furloughed employees because of the government shutdown

Other cuts


United States (n = 3,211)

Actions Organizations Have Taken as a Result of

Financial Challenges in the Last 12 Months


Note: Only statistically significant differences are shown. California responses were excluded from the United States group for this analysis.

United States—California Comparison

• Organizations in California are more likely to lay off employees as a result of financial challenges compared with the

rest of the U.S.

Lay Off Employees

California (32%) > United States (25%)

Actions Organizations Have Taken as a Result of Financial

Stability or Growth in the Last 12 Months



34%

37%

30%

26%

12%

12%

11%

11%

3%

1%

3%

32%

39%

33%

23%

11%

9%

10%

10%

3%

1%

3%

None

Increased salaries

Provided bonuses

Filled positions that were lost(e.g., due to layoffs, attrition, restructuring)

Improved benefits package

Ended hiring freeze

Increased budgets

Allowed for increased employee hours(e.g., back to normal hours or allowing overtime)

Ended furlough

Provided back-pay for furloughed employees

Other improvements



Organizations Hiring Staff in the Last 12 Months



95%

67%

61%

52%

96%

62%

67%

52%

Full-time regular

Full-time contract/temporary

Part-time regular

Part-time contract/temporary

California(n = 529 - 571)

United States(n = 3,082 - 3,330)

Organizations Hiring Staff in the Last 12 Months




• In the last 12 months, organizations in California were less likely to hire part-time employees compared with the rest

of the U.S.

Part-Time Employees Hired in the Last 12 Months

California (61%) < United States (68%)

Importance of Certain Factors in Organizations’ Decision

to Hire for Full-Time Regular Positions


Note: Respondents who answered "don't know" were excluded from this analysis. Only respondents whose organizations were hiring full-time staff were

asked this question. Percentages may not equal 100% due to rounding.

34%

33%

29%

26%

23%

17%

13%

10%

42%

46%

40%

42%

40%

38%

21%

25%

17%

17%

15%

16%

19%

24%

34%

33%

3%

3%

8%

8%

9%

11%

17%

18%

3%

2%

8%

8%

9%

9%

16%

13%

Maintain normal businessoperations

Organizational growth

Changes in business strategy

Improved economy

ExtremelyImportant

VeryImportant

SomewhatImportant

Not veryimportant

Not importantat all

CA (n = 489)

U.S. (n =

2,873)

CA (n = 508)

U.S. (n =

2,984)

CA (n = 506)

U.S. (n =

2,890)

CA (n = 516)

U.S. (n =

3,055)

Types of Full-Time Regular Positions That Organizations

Hired in the Last 12 Months



asked this question. Percentages do not equal 100% due to multiple response options.

42%

61%

82%

45%

62%

79%

Replacements, but with new duties (e.g., dueto turnover, layoffs, attrition, restructuring)

Completely new positions

Replacements (e.g., due to turnover, layoffs,attrition, restructuring)



Change in Hiring Certain Types of Full-Time Regular

Positions in the Last 12 Months



asked this question. Percentages may not equal 100% due to rounding.

32%

25%

47%

45%

67%

66%

55%

62%

47%

49%

24%

26%

12%

13%

6%

6%

9%

8%

Replacements (e.g., due to turnover,layoffs, attrition, restructuring)

Replacements, but with new duties (e.g., due toturnover, layoffs, attrition, restructuring)

Completely new positions

Increased Stayed the same Decreased

CA (n = 373)

U.S. (n =

2,254)

CA (n = 201)

U.S. (n =

1,114)

CA (n = 291)

U.S. (n =

1,655)

Change in Hiring Certain Types of Full-Time Regular

Positions in the Last 12 Months




• In the last 12 months, organizations in California were more likely to increase hiring of full-time regular positions for

replacements (e.g., due to turnover, layoffs, attrition, restructuring) compared with the rest of the U.S

Increased Hiring Full-time Regular Positions for Replacement in the Last 12 Months

California (32%) > United States (24%)

Organizations Requiring New Skills for Full-Time Regular

Positions Hired in the Last 12 Months



asked this question.

48%

50%



Reasons That Positions Require New Skills


Note: Respondents who answered "don't know" were excluded from this analysis. Percentages may not equal 100% due to multiple response options.

Only respondents whose organizations were hiring full-time positions that required new skills were asked this question.

56%

43%

41%

41%

33%

11%

11%

10%

56%

44%

39%

51%

33%

9%

10%

7%

Growth of organization

Developing or offering new products/services

Expanding business into new markets

Changing technology

Reorganization

Replacing temporary workers, part-timeemployees, contractors or freelancers with

full-time positions

Merger or acquisition

Other



Reasons That Positions Require New Skills




• Organizations in California were less likely to indicate that changing technology as a reason that full-time regular

positions require new skills compared with the rest of the U.S.

Require New Skills due to Changing Technology


Level of Difficulty in Finding Qualified Individuals for Full-Time

Regular Positions That Require New Skills over the Last 12 Months


Note: Respondents who answered "don't know" were excluded from this analysis. Only respondents whose organizations were hiring full-time positions

that required new skills were asked this question. Percentages may not equal 100% due to rounding.

2%

29%

53%

15%

4%

31%

54%

12%

Very easy

Somewhat easy

Somewhat difficult

Very difficult



Types of Full-Time Job Categories Organizations Hired in

the Last 12 Months



Only respondents whose organizations were hiring full-time staff were asked this question.

California (n = 525) United States (n = 3,023)

Administrative support staff 58% 60%

Accounting and finance

professionals52% 53%

Managers and executives 50% 49%

IT/computer specialists 39% 42%

Customer service representatives 34% 31%

HR professionals 34% 38%

Engineers 26% 25%

Sales representatives 25% 22%

Hourly laborers 24% 30%

Skilled trades 18% 24%

Types of Full-Time Job Categories Organizations Hired in the

Last 12 Months (continued)



Only respondents whose organizations were hiring full-time staff were asked this question.

California (n = 525) United States (n = 3,023)

Community and social service workers 12% 12%

High-skilled medical 12% 14%

High-skilled technicians 12% 15%

Hourly service workers 12% 15%

Lawyers, judges and legal support workers 11% 10%

Drivers 10% 13%

Production operators 9% 13%

Scientists 9% 7%

Educators 8% 12%

Protective service workers 4% 8%

Other 6% 5%

Types of Full-Time Job Categories Organizations Hired in

the Last 12 Months




• In the last 12 months, organizations in California were less likely to have hired hourly laborers compared with the

rest of the U.S.

• In the last 12 months, organizations in California were less likely to have hired for skilled trades, such as electricians,

carpenters, machinists, mechanics, welders and plumbers compared with the rest of the U.S.

Hourly Laborers


Skilled Trades



Demographics (California)

Demographics (CA): Organization Industry


Note: n = 572. Percentages do not equal 100% due to multiple response options.

Percentage

Professional, scientific, and technical services 16%

Accommodation and food services, retail/wholesale trade 11%

Health care and social assistance 11%

Manufacturing 11%

High-tech 10%

Other industry 9%

Government agencies 9%

Finance, insurance, real estate and rental and leasing 8%

Educational services 7%

Construction, mining, quarrying, and oil and gas extraction 6%

Demographics (CA): Organization Sector


Note: n = 572. Percentages do not equal 100% due to rounding.

49%

22%

17%

11%

Privately owned for-profit

Publicly owned for-profit

Nonprofit/not-for-profit organization

Government

Demographics (CA): Organization Staff Size


n = 504

28%

30%

20%

15%

7%

1 to 99 employees

100 to 499 employees

500 to 2,499 employees

2,500 to 24,999 employees

25,000 or more employees

n = 535

Demographics (CA): Other


U.S.-based operations only 67%

Multinational operations 33%

Single-unit organization: An organization

in which the location and the organization

are one and the same.

30%

Multi-unit organization: An organization

that has more than one location.70%

Multi-unit headquarters determines HR

policies and practices48%

Each work location determines HR policies

and practices3%

A combination of both the work location and

the multi-unit headquarters determines HR

policies and practices

49%

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 = 542

n = 398

31

SHRM Survey Findings

• 3,655 HR professionals participated in this survey from a randomly selected sample of SHRM’s

membership from the entire United States and an additional random sample from California

• U.S. respondents (including CA) = 3,335, response rate = 13%, margin of error = +/-2%

• CA respondents = 572, response rate = 10%, margin of error = +/-4%

• Survey fielded December 16, 2013 - January 16, 2014

Survey Methodology

Economic Conditions—California Overall Financial Health and Hiring ©SHRM 2014

• SHRM California Resources

» http://www.shrm.org/hrdisciplines/pages/california.aspx

• SHRM Leading Indicators of National Employment (LINE)

» http://www.shrm.org/research/monthlyemploymentindices/line/pages/default.aspx

• SHRM Jobs Outlook Survey (JOS)

» http://www.shrm.org/research/monthlyemploymentindices/lmo/pages/default.aspx

• SHRM Metro Economic Outlooks

» http://www.shrm.org/research/monthlyemploymentindices/pages/metroeconomicoutlooks.aspx

• SHRM’s Workforce Readiness Resource Page

» http://www.shrm.org/hrdisciplines/staffingmanagement/articles/pages/workforcereadiness.aspx

• SHRM Foundation: What’s Next: Future Global Trends Affecting Your Organization, Evolution of Work and the Worker

» http://www.shrm.org/about/foundation/shapingthefuture/documents/2-14%20theme%201%20paper-final%20for%20web.pdf


Additional SHRM Resources

http://www.shrm.org/hrdisciplines/pages/california.aspx

http://www.shrm.org/research/monthlyemploymentindices/line/pages/default.aspx

http://www.shrm.org/research/monthlyemploymentindices/lmo/pages/default.aspx

http://www.shrm.org/research/monthlyemploymentindices/pages/metroeconomicoutlooks.aspx

http://www.shrm.org/hrdisciplines/staffingmanagement/articles/pages/workforcereadiness.aspx

http://www.shrm.org/about/foundation/shapingthefuture/documents/2-14 theme 1 paper-final for web.pdf

For more survey/poll findings, visit shrm.org/surveys

For more information about SHRM’s Customized Research Services, visit

shrm.org/customizedresearch

Follow us on Twitter @SHRM_Research


About SHRM Research

Project lead:

Tanya Mulvey, researcher, SHRM Research

Project contributors:

Alexander Alonso, Ph.D., SPHR, vice president, SHRM Research

Evren Esen, director, Survey Programs, SHRM Research

Yan Dong, Survey Research Center, SHRM Research

Christina Lee, researcher, SHRM Research

Qikun Niu, intern, SHRM Research

Jennifer Schramm, manager, Workplace Trends and Forecasting, SHRM Research

Joseph Coombs, senior analyst, Workforce Trends, SHRM Research

Copy editor:

Katya Scanlan, SHRM Knowledge Center

http://www.shrm.org/surveys

http://www.shrm.org/customizedresearch

http://twitter.com/SHRM_Research

Founded in 1948, the Society for Human Resource Management (SHRM) is the

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Representing more than 275,000 members in over 160 countries, the Society is the

leading provider of resources to serve the needs of HR professionals and advance the

professional practice of human resource management. SHRM has more than 575

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United Arab Emirates. Visit us at shrm.org.


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