Sustained levels of low unemployment, increased competition for talent and high employee turnover are creating headwinds for U.S. companies seeking to augment their workforce. Middle market businesses, however, have clear opportunities to offer more nontraditional incentives to attract and retain a new generation of employees and, when appropriate, to look into technology or outsourcing to solve unmet staffing needs and augment their current labor force. According to a recent RSM US Middle Market Business Index survey, most midsize companies have yet to significantly engage on either front. Middle market businesses are offering enhanced benefit packages and making other improvements to traditional incentives—all positive steps—but these are likely not enough to cultivate and sustain a cutting-edge workforce of the future. These businesses have also shown a reluctance to invest in technologies that could help make their existing workforce more efficient.
The MMBI survey, conducted in April 2019, gathered the perspectives of more than 400 senior executives in nonfinancial companies and non-profits with revenues ranging from $10 million to $1 billion, and financial companies with assets under management of $250 million to $10 billion. The survey found that, although the types of jobs these companies sought to staff differed, companies both large and small were having difficulty attracting and retaining talent. Moreover, many companies are not engaging in aggressive hiring and instead are investing in new skills training, increasing compensation and improving business processes. Only about one-quarter plan to outsource some functions or capabilities.
A need for willing and available workers
Jobless claims remain near a 50-year low, and the number of employed adults is at an all-time high. “This should be good news and, for many households, it is,” notes Joseph Brusuelas, chief economist at RSM US LLP. “But for the middle market, these historic numbers are creating significant growth challenges affecting everything from holiday hiring on the retail side to commercial and residential housing construction, transportation, manufacturing and professional services.”