CHICAGO, Jan. 13, 2022 /PRNewswire/ — The permanent workforce transformation is well underway in the middle market, according to the RSM US Middle Market Business Index (MMBI), provided by RSM US LLP (“RSM”) in partnership with Chamber American trade. The report reveals that the structural shift to remote and hybrid work models is here to stay, and the data confirms that executives expect a tight labor market to remain a major challenge over the next year.
In the last quarter of 2021, more than a third (36%) of middle-market companies surveyed said they now have remote employees who did not do so before the pandemic. Of those, 65% embrace hybrid work, which means employees work off-site part-time and part-time in the office. Nearly half (48%) of survey respondents have made remote work a permanent option for some full-time employees, while 42% are considering making the switch.
“The pandemic has been a once-in-a-century event that has dramatically changed the lives of people and society as a whole,” said Joe Brusolas, chief economist at RSM US LLP. “It has also changed the whole perspective of where, when and how people work. The office of the future will have new standards and hire people with different priorities. Middle market companies that provide the flexibility and culture that workers demand will gain prominence, lasting competitive advantage, and most of all in an incredibly tight labor market. It is credible which will transform the balance of power for employees for the foreseeable future.”
In the middle market, previous concerns about low productivity, teamwork, and culture have proven mostly unfounded. Of those survey respondents who had previously not allowed remote work, 77% said that low productivity was not an issue at all or a minor issue. The majority (70%) stated that reducing teamwork was either a minor problem or not a problem at all, and 75% said that worker management challenges created by telework were not a problem at all or just a minor problem.
Although 27% of respondents said remote work created a major problem in maintaining culture, 68% of companies reported that it resulted in only a minor problem, or that it was not a problem at all.
Middle market companies adapt to the competitive job market While many of the changes have been positive for mid-market companies, they are struggling with challenges related to a tight job market. Fifty-six percent of the companies surveyed plan to increase hiring over the next year, and more than 90% of these companies admit that it will be at least somewhat challenging to hire employees for their open positions. The outlook on employee retention is similar, with 85% of CEOs stating that employee turnover will be a challenge.
A shortage of qualified labor was cited as a reason for anticipating employment problems by 96% of companies, including 43% who declared it a major problem. More companies said local competition for workers was a major cause of hiring difficulties, while slightly fewer firms cited competition for workers with other employers in their industry as a factor. Other responses have included issues of 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,” said Neil Bradley, executive vice president and chief policy officer at the Chamber of Commerce. American. “In this tight job market, companies that adapt their workforce practices for more flexibility, invest in training and skills upgrading opportunities, and look for workers from overlooked talent pools, will be in a better position to compete for talent in a post-pandemic economy.”
Nearly half (49%) of CEOs surveyed said they bring in talent for work that can be done remotely from a broader geographic area than it was before COVID-19. This is especially true for larger mid-market companies (from $50 million to $1 billion in annual revenue), where 59% say they are expanding their talent pool to workers who may not be in the same city, or even the same time zone, like them. The bosses.
In an effort to recruit and retain individuals, 59% of mid-market companies that think vacancy recruitment will be very difficult, intense or somewhat, say they plan to increase bonuses, and 48% of these companies intend to boost their benefits. These findings seem to indicate that many organizations are still trying to lure people in with traditional offers of better wages and benefits.
Back to the office and the future of workMid-market companies are transitioning from a pandemic environment to an endemic environment, and they are considering what areas they would like to invest in over the next year. For example, 66% of respondents plan to invest in training new skills for their existing employees. At the same time, companies will need to balance the well-being of their employees and customers with the limitations of their office space while complying with federal or state laws.
Switching to remote work does not appear to indicate a looming decrease in office space because 68% of respondents using the hybrid model have plans to maintain permanent workspaces. Sixty-four percent of respondents do not plan to reduce the number of physical workplaces in their offices over the next two years. According to the report, companies that do not offer telecommuting or blended work will face a disadvantage in recruiting and retaining talent.
Survey data also shows that the future of work includes new systems and technology to increase worker efficiency and improve cybersecurity. Among companies that said hiring vacancies is at least somewhat challenging, 59% are planning or considering investing in automation or information technology and 73% say their goal is to increase employee productivity. Survey results indicate that these companies are not looking to reduce the number of employees, but rather to improve job satisfaction by reducing administrative and repetitive tasks.
Survey data informing this index reading was collected between October 4 and October 21, 2021.
About the US RSM Business Middle Market Index RSM US LLP and the US Chamber of Commerce have entered into a partnership to offer the US RSM Middle Market Index (MMBI). It is based on research on mid-market companies conducted by the Harris Poll, which began in the first quarter of 2015. The survey is conducted four times a year, in the first month of each quarter: January, April, July and October. The survey panel is made up of 700 middle market executives and is designed to accurately reflect conditions in the middle market.
The MMBI Index was created in collaboration with Moody’s Analytics from a subset of questions in a survey that asks respondents to report change in a variety of indicators. Respondents are asked a total of 20 questions similar to those found in other qualitative business surveys, such as those from the Institute for Supply Management and the National Federation of Independent Business.
The 20 questions relate to changes in various metrics of their business, such as revenue, profits, capital expenditures, staffing, employee compensation, prices paid, prices received, and inventories. There are also questions regarding the economy and outlook, as well as the availability of credit and borrowing. For ten of the questions, respondents are asked to report the change from the previous quarter; For the other ten, they were asked to identify the likely direction of these same indicators six months in advance.
Responses to each question are reported as spread indexes. The MMBI is a composite index computed as an equal weighted sum of the prevalence indices for 10 survey questions plus 100 to keep the MMBI from becoming negative. A reading above 100 for the MMBI indicates that the middle market is generally expanding; Below 100 indicates that he is generally contracted. The distance from 100 indicates the force of expansion or contraction.
About the American Chamber of Commerce The American Chamber of Commerce is the world’s largest business organization representing companies of all sizes in every sector of the economy. Members range from the small businesses and local chambers of commerce that line the main streets of America to leading industry associations and large corporations.
They all have one thing in common: They depend on the United States Chamber to be their voice in Washington, across the country, and around the world. For more than 100 years, we have advocated pro-business policies that help companies create jobs and grow our economy.
About RSM US LLPThe purpose of RSM is to deliver the power of understanding to our clients, colleagues, and communities through world-class audit, tax, and advisory services focused on mid-market businesses. The clients we serve are the engine of global trade and economic growth, and we focus on developing leading professionals and services to meet their evolving needs in an ever-changing business environment.
RSM US LLP is a US member of RSM International, a global network of independent audit, tax and advisory firms with 51,000 people in 123 countries. For more information, visit rsmus.com, like us on Facebook, follow us on Twitter and/or connect with us on LinkedIn.
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Source: RSM US LLP