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Hawaii Employers Council released the results of the 2022 National Business Trends Survey through the partnership of various employer associations throughout the country. The survey was conducted during September and October 2021 and solicited data from executives at 1,216 organizations, covering employer locations in all 50 states.

The national distribution of participating businesses by company size/employment and profit status mirror the landscape of Hawaii businesses, making the national survey a strong vector for Hawaii businesses to turn to for trends and expectations in the coming year.

While Hawaii often finds itself unique from the rest of the United States – whether it’s in adapting new policies and procedures or implementing programs – this year’s Business Trends Survey affirms that the entire nation faces the same challenges, obstacles, uncertainties, and measured movement forward as the world begins its third year facing a global pandemic. It’s common to hear pandemic strategies described as “building the plane while it’s flying,” a statement that can describe the business community facing challenges, making decisions and then having to pivot as circumstances change.

There have also been significant public discussion and theories surrounding pandemic-related business trends, from recruiting and retention to employee displacement to best-practices moving forward, the 2022 National Business Trends Survey shines a clear spotlight on the issues and challenges the business community considers most critical and most vexing.

One hundred twenty-two Hawaii executives were requested to provide responses to various questions on the topics below to identify their organization’s business plans for the coming year:

• Business Outlook
• Business Investment Plans
• Staffing Plans
• Recruitment/Retention Challenges
• Job Creation Challenges
• Business Improvement Measures
• Pay Strategies
• Business Challenges

Executive Expectations
Both nationally and locally, the greatest challenges facing executives is talent acquisition and talent retention.

When describing the business outlook for 2022, local executives are very optimistic with 44.3% of these executives feeling that the overall US economy will stay the same in the next 12 months as compared to 28.6% in 2021 while 42.6% expect an improvement in the economy, which is a significant increase over last year at 31.0%.

Over one-half of participating local executives, 53.3% anticipate a slight increase in sales/revenue, this is a significant increase from 31.7% in 2021.

They also identified several short-term challenges to overcome to achieve business growth in 2022 (labeled as serious challenges). These top five challenges in Hawaii include (the top three are in alignment with National reported challenges):

• Talent Acquisition (45.1%)
• Talent Retention (44.6%)
• Ability to pay competitive wages/salaries (35.6%)
• Cost of Materials (30.0%)
• Employee Safety (29.8%)

Additionally, long-term challenges described as serious and are top of mind include:

• Talent Retention (43.8%)
• Talent Acquisition (43.0%)
• Ability to pay competitive wages/salaries (41.0%)
• Cost of Equipment (29.9%)
• Cost of Material (29.4%)

COVID-19 Impacts
As organizations continue to address the COVID-19 pandemic, 63.1% indicated that they are moderately to extremely concerned on how the pandemic impacts human resources (e.g., policies, remote work, employee absences). This increased significantly from 38.8% in 2021.

Nearly two-thirds, 62.3% are moderately to extremely concerned on how COVID-19 impacts business continuity (e.g., supply chain, financial implications, temporary shutdowns). This decreased slightly from 65.1% in 2021.

Respondents shared that COVID-19 has moderately to significantly impacted the following business aspects for their organization:

• Hiring projections/outlook (49.2%)
• Business outlook (i.e. sales/revenue) (43.8%)
• Business/capital spending (38.8%)

Given the national concern for COVID-19 and employee safety, participating organizations are following these safety practices in 2022 to minimize risk and ensure compliance with federal, state, and local laws. The top seven safety practices are listed in order of most received:

As remote work has become a standard for some businesses during the pandemic, organizations shared their likely long-term remote work plans:

• Few, if any, staff will work remotely on a regular full-time basis after the pandemic (42.6%)
• Some staff will work remotely on a regular full-time basis after the pandemic if their job allows it (28.7%)
• Not applicable, our staff never moved to remote work during the pandemic (22.1%)
• Most staff will work remotely on a regular full-time basis after the pandemic (4.1%)
• All staff will work remotely on a regular full-time basis after the pandemic (2.5%)

Recruitment & Retention
Two-thirds of responding organizations, 66.4% reported that it has become more difficult to hire employees within their industry. The reasons noted for the difficulty in recruiting are as follows:

• Lack of qualified candidates (79.0%)
• Candidates want more pay than we can/will offer (58.0%)
• Market competition/high demand (53.1%)
• Lack of work experience (46.9%)
• Lack of technical skills (24.7%) 

Over one-third, 34.4% indicated that they executed 2021 recruitment plans as initially planned. This activity was primarily due to:

• Replacing due to voluntary terminations (82.8%)
• Replacing due to retirement (57.5%)
• Newly created jobs (55.7%)
• Replacing due to involuntary terminations (50.8%)

Overall, 32.0% of participating organizations felt somewhat satisfied with their 2021 recruitment efforts and 40.2% felt somewhat satisfied with their retention efforts.

The job groups which were identified as the most challenging to recruit and retain in 2021, are ranked in the following table based on the number of responses received:

Throughout 2021, participating organizations developed and implemented strategies to address their recruiting challenges. While increasing starting pay was implemented by many, some organizations filled jobs with existing staff, as well as utilizing online/remote meetings as effective means for successful recruitment efforts.

The top three recruitment strategies implemented were:

• Increasing starting salaries (55.7%)
• Filling jobs with existing staff that have potential to learn/grow (45.9%)
• Moving interviews/training online/remote meetings (40.2%)

The top three retention strategies implemented were:

• Adjusting pay ranges upward (54.9%)
• Focusing on existing staff receiving additional training/development (50.8%)
• Focusing on existing staff retention in jobs where recruitment is difficult (50.0%)

Additionally, participants shared the implementation of variable pay strategies such as: employee referral bonuses, year-end bonuses, and individual incentives to support recruitment and retention efforts, which has not changed from last year.

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

• Competitive pay (86.9%)
• Good work-life balance (70.5%)
• Flexibility in work hours (60.7%)
• Competitive / robust health benefits (37.7%)
• Vacation / paid time off (27.1%)

Although the above rounds out the top five factors, recognition and reward for good performance and strong organization culture were close behind.

Maintaining staff levels and not adding to current staffing levels was a top priority for nearly one- half of the respondents at 48.4% for 2021 and hiring permanent staff will be the top planning strategy for 2022 at 48.4%.

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. Given the spotlight on pay equity, the most common actions that survey respondents identified to support base pay that is perceived as fair, competitive and in legal compliance include (no change in order from last year):

• Establishing and/or updating a formal compensation structure (38.5%)
• Conducting internal pay audits (27.9%)
• Conducting external compensation analysis to compare internal positions with the external market (27.1%)

Looking at pay data from a recruitment perspective, more than 35 cities or states have now banned employers from asking for an applicant’s pay history. Act 108 (Session Laws of Hawaii 2018) also prohibited this practice in Hawaii. Starting in January 2019, Hawaii employers could no longer ask prospective employees about their wage or salary history as part of an application process or compensation offer. It also made it unlawful for employers to discipline or prohibit employees from talking about their wages with others or inquiring about other employees’ wages.

2022 Insights

Looking forward to 2022, key wage and salary strategies include:

• Increasing wages and salaries (Merit, General, COLA) (65.6%)
• Paying variable bonus awards (22.13%)
• Uncertain (20.5%)

In closing, the top overall organizational initiatives moving into 2022 are:

• Investing in new technology (42.6%)
• Investing in equipment (37.7%)
• Increase in flexible work arrangements (26.2%)
• Increase recruiting emphasis (23.8%)
• Offer hybrid work for positions we have not had in the past (23.8%)

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 Dawn Mitchell, Manager, Surveys & Compensation Services (dmitchell@hecouncil.org), or Susan Amuro, Surveys & Research Analyst (samuro@hecouncil.org).