2020 National Business Trends Survey

Hawaii Report - Survey Summary Highlights

Hawaii Employers Council recently released the results of the 2020 National Business Trends Survey, a survey provided through the partnership of various Employer Associations throughout the nation.  The survey was conducted during the months of September and October 2019 and solicited data from executives at 1,093 organizations, covering employer locations in all 50 states.  Participants were requested to provide responses to various questions to identify organization business plans for the coming year.  While executives continue to be optimistic about the future, based on the national and Hawaii results, there was a decline in the confidence level in the overall US economy for the next 12 months.

We share insights of Hawaii executives covering a few topics which range from expectations regarding recruitment & retention challenges / plans, base pay initiatives, key wage and salary strategies and organizational initiatives in this summary highlight.

Executive Expectations

When describing the business outlook for 2020, almost half of participating executives (45%) in Hawaii anticipate a slight increase in sales / revenue.  However, they also identified several short-term challenges to overcome to achieve business growth in 2020 (labeled as serious challenges).  The challenges, which are aligned with national results, include:

• Talent acquisition (58%)
• Talent retention (49%)
• Ability to pay competitive wages/salaries (45%)
• Ability to pay for benefits costs (32%)
• Competition in general (29%)
• Technology issues / utilizing the right systems (27%)

Additional long-term challenges described as serious, and are top of mind as responding executives move into 2020, include:

• Talent acquisition (67%)
• Ability to pay competitive wages / salaries (55%)
• Talent retention (55%)
• Ability to pay for benefits costs (47%)
• Competition in general (38%)
• Technology issues/Utilizing the right systems (35%)
• Cost of equipment (32%)
• Cost of material (30%)

Recruitment & Retention

A number of responding organizations (53%) indicated that they executed 2019 recruitment plans as initially planned.

The increased activity was primarily due to:

• Voluntary terminations (89%)
• Retirement (69%)
• Newly created jobs (63%)
• Involuntary terminations (61%)

Overall, forty-four percent of participating organizations felt somewhat satisfied with their 2019 recruitment and retention efforts respectively.  Groups categorized as professional staff (non-managers), middle managers and skilled production workers continue to push organizations to develop creative ways to recruit and retain employees.

Nearly two-thirds of the survey respondents (61%) reported facing challenges with the recruitment of Professional staff (non-managers) and over half (53%) reported facing challenges with Middle Manager recruitment.

The job groups which were identified as the most challenging in 2019 in regards to recruitment and retention are ranked in the below table based on the number of responses received.

Throughout 2019, participating organizations developed and implemented strategies to address their recruiting struggles.  While increasing starting pay was implemented by many, some organizations filled jobs with existing staff with potential, as well as utilizing social media as effective means for successful recruitment efforts.

The top three recruitment strategies implemented were:

• Increasing starting salaries (51%)
• Filling jobs with existing staff that lack job skills but have potential to learn/grow (46%)
• Starting / increasing use of social media for recruiting (45%)

As for retention of staff, survey respondents indicated that it is imperative to focus on existing staff retention in jobs where recruitment is difficult.

The top three retention strategies implemented were:

• Adjusting pay ranges upward (61%)
• Focusing on existing staff receiving additional training/development (61%)
• Filling jobs with existing staff that lack job skills but have potential to learn/grow (48%)

Additionally, participants shared the implementation of variable pay strategies such as:  year-end bonuses, employee referral bonuses and individual incentives to support recruitment and retention efforts.

As organizations work to develop new or enhanced recruitment strategies, understanding what prospective employees are looking for when applying for a job is important.  Below are the top 5 most important factors prospective employees are looking for as shared by survey participants.

• Competitive Pay (85%)
• Good work / life balance (70%)
• Flexibility in work hours (54%)
• Opportunities for advancement (52%)
• Competitive health benefits (39%)

Although the above rounds out the top 5, notably, recognition and reward for good performance and strong organizational culture were close behind as strong contenders.

Maintaining staff levels and not adding to current staffing levels was a top priority for over half of the respondents (53%) for 2019 and this strategy will continue through 2020.

Pay Data

Competitive base pay is essential to attract and retain talent needed to help an organization thrive.  Without competitive base pay, all other benefits offered have less of an impact on recruitment and retention efforts.  Along with understanding the importance of competitive base pay, organizations also need to minimize risk to ensure compliance with federal, state and local laws.  The most common actions that survey respondents identified to support base pay that is perceived as fair, competitive and in legal compliance include:

• Establishing a formal compensation structure
• Conducting external compensation analysis to compare internal positions with external market
• Conducting various pay audits or internal analysis to ensure compliance and consistency

Looking at pay data from a recruitment perspective, some cities and states have passed legislation prohibiting employers from asking applicants for pay information and Hawaii joined these cities in January 2019.

Hawaii legislators passed Act 108, which prohibits employers from asking job applicants about their salary history, or otherwise relying on the applicant’s salary history to determine the individual’s benefits or compensation.  In addition, Act 108 also makes it unlawful for employers to discipline or prohibit employees from talking about their wages with others or inquiring about other employees’ wages.

2020 Insights

Looking forward to 2020, key wage and salary strategies include:

• Increasing wages / salaries (Merit, General, COLA) (72%)
• Paying variable bonus awards (37%)

In closing, the top overall organizational initiatives moving into 2020 are:

• Investing in new technology (56%)
• Investing in equipment (45%)
• Increasing emphasis on recruitment of talent (34%)
• Increasing training budget (28%)
• Use data analytics to improve business strategy (28%)
• Increase in flexible work arrangements (26%)

HEC conducts a variety of compensation and benefits surveys to provide data useful in developing and administering compensation and benefit plans, and personnel policies.  Custom snapshots and comparison reports from our compensation surveys are available, along with customized, proprietary surveys conducted on your behalf.  Our Survey & Compensation experts can also work with members on employee opinion surveys to identify gaps between being an employer of choice and being merely an employer.  For more information, please contact Cathy Keaulani, Survey & Compensation Services Manager (ckeaulani@hecouncil.org), or Susan Amuro, Surveys & Research Analyst (samuro@hecouncil.org).