Employer Survey

The intent of this survey was to understand the business climate, market conditions, employment trends and occupation and skills demand from businesses in the St. Louis region. Data for this survey was taken from the MERIC employer database which is comprised of data from InfoUSA - a source that contains up-to-date contact lists of over 400 million companies across the nation. The total population consisted of 117,970 businesses made up of 94,225 businesses from the Missouri counties and 23,745 businesses from the Illinois counties. The total population was then stratified by industry classification or NAICS (North American Industry Classification System) codes. There are 22 such super sector industry classifications. A random sample of 1,537 interviews was selected and telephone interviews were conducted with business owners or those in charge of hiring across the region. The quantitative results from this survey were also supplemented with qualitative data from employer case studies.

Employer Size

In the population, it was noted that the largest group of employers (87%) surveyed comprised of businesses with more than one but less than a hundred employees.

Source: MERIC

Key Findings

Business Conditions

To assess how businesses are dealing with the slowdown in the economy, employers were asked to rate their current business performance in terms of revenue and sales. A majority of the employers in the St. Louis Region (40%) indicated a positive outlook, twenty nine percent indicated no change and twenty one percent indicated a poor outlook. Response to a follow-up question about the expectations of business performance in the next 12 months was somewhat more encouraging with forty eight percent indicating it as positive, twenty eight percent indicated no change and only thirteen percent stating it as poor.

Access to Credit for Business Operations

The current financial crisis has created great concern about both the degree to which companies will have problems securing credit and the duration of this situation. While, a little over half of the respondents in this survey (55%) reported that access to credit for business operations had stayed the same, nineteen percent indicated that credit markets had tightened, while twenty three percent were unsure or declined to answer the question. Only four percent of respondents reported that access to credit had increased. Some companies declared no shortage of cash flow due to conservative internal fund management or being self funded.

Cost of Benefits

Employee benefits are a significant part of an employer's budget, accounting for a large portion of total employee compensation. When employers in the St. Louis region were surveyed regarding the cost of benefits they offered to their employees, fifty eight percent of them stated that the cost of benefits had increased, thirty two percent said they had decreased and about ten percent had no comments.

It is interesting to note that even though majority of the employers stated that costs are rising, surveyed companies also indicated that they would not be reducing the benefits they offer new hires when they do begin hiring in order to be competitive and attract and retain the right talent.

Barriers to Expanding Employment

To better understand how the recent economic downturn was affecting the talent pipeline in the St. Louis region, it was essential to investigate the barriers employers in the region face in acquiring talent. While thirty percent of employers stated that current economic conditions were the biggest barrier to expanding employment, twenty three percent indicated the shortage of skilled workers and training programs in the region was also a barrier.

This has major implications for workforce development decision makers as they determine whether to maintain existing programs or re-tool for a substantially changed labor market in the post-recovery period.

Strategies for a Changing Economy

As the economy begins showing signs of recovery, employers in the region have a somewhat positive outlook towards the future with regards to talent acquisition. As an alternative to laying off workers, surveyed employers indicated that they used several options as listed below:

Source: MERIC

Some employers also shared other measures they practiced as an alternative to the above listed options. They consolidated functions, established stricter governance guidelines for promotions within the organization and were conservative to new hiring.

Hiring Trends

When asked about their hiring plans for the future, an overwhelming majority of employers (68%) stated they were inclined to keep their employment level constant, although twenty three percent indicated a desire to increase hiring and nine percent indicated a decrease in hiring.

Talent Acquisition

Employers have a mixed bag of strategies for acquiring new talent in the post-recovery period. Of those who would hire new workers, there was almost an equal split between those who would hire full time employees and those who would hire part time employees. Some employers indicated that the nature of the job often demanded certain types of employment, e.g. contract workers had to be hired for specific projects only for a fixed duration of time.

Hiring by Industry Sector

Analysis of this survey indicates that the industry sectors with the best outlook for employment are Educational Services, Healthcare and Social Assistance, Retail Trade and Manufacturing. Listed below are the industry sectors that want to hire more workers in the next 12 months.

Source: MERIC Short-tem Occupational Projections

Synopsis

The results of this survey indicate that the impacts of the economic downturn are clearly being felt in the St. Louis Region. However businesses are optimistic about growth in the next 12 months. They are trying to sustain themselves by holding the line on hiring and costs but they have not abandoned their plans for hiring all together, particularly going forward and they are committed to maintaining their fringe benefit packages for new workers. Although the economic downturn has impacted their ability to expand, they are nearly as constrained by the lack of skilled workers and training programs, issues that existed before the downturn. Although hiring has definitely slowed in some industry sectors the employment outlook for other areas is still good, including the region in the areas of Educational Services, Healthcare and Social Assistance, Retail Trade and Manufacturing.