MidAtlantic Region Employers Optimistic about 2012 According to Regional Economic Trends Survey
Results from a regional economic trends survey show 70% of employers’ in this region believe their organization will increase its sales/revenue in 2012 as compared to 2011. The 2012 Economic Trends Survey, conducted by the Employers Association of America, included regional results among members of the MidAtlantic Employers’ Association (MEA).
“Overall employers in the MidAtlantic region are cautiously optimistic about 2012,” according to Kevin Robins, CEO of MidAtlantic Employers’ Association, a member based association that provides middle market businesses with HR services. “It is also encouraging that 1 in 3 regional employers plan to increase staff levels in 2012 and less than 10% plan to reduce staff levels.”
Highlights from Employers in the MidAtlantic Region
70% believe their organization’s projected business outlook for 2012 compared to 2011 will see a slight or significant increase in sales/revenue (16% forecast a significant increase and 54% forecast a slight increase). Only 9% forecast a slight or significant decrease in sales/revenue.
21% of respondents believe the economy will be better in 2012 than 2011; 69% believe the economy will be about the same; and 10% believe the economy will be worse.
33% responded they plan to increase staff levels in 2012 while 48% believe they will maintain current levels. Only 7% believe they will be reducing staff levels in 2012.
60% of employers in the MidAtlantic region plan to hire in the 1st or 2nd quarters of 2012.
In 2012, 55% of area employers are planning process improvement initiatives and 31% plan to shift a larger percentage of healthcare costs to employees.
Highlights from the National Survey
Economy & Sales: Optimistic
An impressive 90% of the executives expect the overall economy will be about the same or better in 2012 compared to 2011 (58% about the same, 32% better). Similar to last year, respondents are more confident about their own business outlook than the overall economy. While 32% anticipate the overall 2012 economy will be better than 2011, 67% of business owners expect increases in their own sales / revenue. Not all respondents were quite as enthusiastic with 23% of respondents anticipating flat sales / revenue and 10% expecting a decrease in sales/revenue.
Plans for significant new investments in people, facilities and/or equipment are split. 51% say they will not make investments while an optimistic 49% of respondents plan investments to improve service capacity and/or revenue in 2012.
Job Creation Barriers
The greatest barrier to job creation, according to executives, is concerns about further economic decline (59%). The next two greatest response groups said the biggest barriers are limited consumer demand (16%) and excessive government regulations (15%).
Staff Size: Growing A Bit
Although 54% of the organizations reporting do not plan to increase the size of their staff in 2012, nearly 36% of the respondents plan to hire additional staff, with most of those expected during the first half of 2012. These results are similar to last year.
Compensation & Benefits Strategies
Employer confidence has improved over one year ago with 70% of participating organizations actually giving a pay increase in 2011. This is up from the 59% of participating organizations that planned an increase in 2011. We see a similar pattern for the 2012 forecast. Significantly fewer organizations are delaying or freezing wages (14% in 2012 vs. 20% in 2011) and nearly 66% of those surveyed are planning a pay increase in 2012 – up 7% from 2011.
A minority of the organizations surveyed, 35%, froze or reduced pay as cost cutting measures in 2011. Of the organizations that froze or reduced pay in 2011, 29% plan to completely or partially restore pay to some employees in 2012. These increases are in the form of merit, general or cost-of-living adjustment (COLA). Of the organizations that froze or reduced pay in 2011, 33% report a continuation of the pay freeze and 39% are uncertain.
More Cost-Cutting
As executives continue to manage their organizations through the challenging economy, 52% plan to trim costs by focusing mainly on lean / process improvement initiatives during 2012. The top cost-cutting measures planned for 2012 are outlined below. It’s significant to note that relatively few organizations plan layoffs with just 6% of respondents—comparable to 2011 results.
|
Top Cost Cutting Measures for 2012 |
|
|
Measures |
Percentage |
|
Lean / process improvement initiatives |
52% |
|
Shift a larger percentage of healthcare costs to employees |
24% |
|
Layoffs (permanent reduction in staff) |
6% |
|
Reduce paid time off benefits (vacations, personal days, etc.) |
4% |
“Interestingly, 39% of respondents have no cost-cutting measures planned for 2012. This is a 5% decrease compared to last year’s survey results. It’s not clear if this is a barometer of employers’ optimism or if it is an indicator of how lean companies are operating after past cost-cutting measures,” said Kevin Robins.
Survey Information
The Employer Associations of America’s data reflects national conditions. EAA surveyed 1890 companies: 45 percent were from manufacturing, 10 percent were from Professional and Business Services, 6 percent were from Health Services, and 39 percent from other industries. The survey also represents all sizes of companies, from 1-99 employees (53 percent), 100-249 employees (25 percent), 250-499 employees (12 percent), 500-999 employees (5 percent), and over 1,000 employees (5 percent). The survey data was collected in October through November of 2011.
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About EEA and MEA
The Employer Associations of America (EAA) consists of 37 regional employer associations that serve 48,000 companies and over 5,600,000 employees. The EAA’s mission is to advance a national presence as well as the regional success of its members through collaboration, efficiency, and shared knowledge and resources.
The MidAtlantic Employers’ Association (MEA) is dedicated to serving its regional members and are trusted partners that help members maximize the performance of their employees and organization. MEA’s Human Resource and Business professionals provide businesses with expertise in the areas of compliance, recruitment, retention, compensation and surveys, benefits, safety, and training and organizational development.