1、Contributors:Author:Joe Galvin,Vistage WorldwideAnne Petrik,Vistage Worldwide Marc Emmer,Optimize Inc.The State of EMPLOYMENTAND WAGESVistage Worldwide Inc.22_333_ Vistage Worldwide Inc.FOREWORD The post-pandemic workforce continues to pave the way for a new kind of workforce.Unemployment is below 4

2、.0%and according to our research,52%of CEOs are planning on increasing headcount in the next 12 months,which follows a trend of robust hiring over the last 18 months.With those factors combined,workers have more options than ever before.The workforce has a unique opportunity to upgrade,evaluating fa

3、ctors that include company purpose and values,role,compensation,development opportunities,benefits,and now flexibility,all in the efforts to gain better life-work alignment.The result of this workforce shift driven by our collective pandemic experience and the rising influence of the Millennial and

4、Gen Z in the workforce means CEOs have to adapt quickly to this changing environment.The traditional,Industrial-era analog workplace must now adapt as well to accommodate the requirements of the new workforce.The pandemic ignited instantaneous behavior change forcing everyone into the WfH(work from

5、home)model to survive.Once given the chance,knowledge workers proved they could maintain productivity remotely without having to commute every day.With that,the WfH genie was out of the bottle,advancing the workforce toward the digital“Workplace 180”where individual tasks are done remotely and inter

6、actions take place both virtually and in person.The focus of leaders shifts from managing and monitoring time and attendance to analyzing productivity and performance.The road to that future state is bumpy.Despite the pandemic receding,hybrid work is here to stay.CEOs continue to be challenged to fi

7、nd the right workplace balance for essential,hybrid and remote employees that meets the needs of workers without sacrificing performance.Marc Emmer,a renowned Vistage speaker,member and Research Center contributor,takes a deep dive into the state of employment and explores the key forces driving tod

8、ays workplace.Spiraling wage pressures,the hybrid work environment and employee satisfaction all contribute to the evolution of the workplace,and provide CEOs with the opportunity to adapt to most effectively unleash the productivity of their workforce.Joe Galvin Chief Research Officer,V Vistage Wor

9、ldwide Inc.SPECIAL REPORT:The State of Employment and WagesPrivate U.S.employers find themselves in a conundrum.Facing a talent war,high inflation and severe competitive pressures,employers are resetting their expectations on the availability and cost of labor.Throughout history,dramatic increases i

10、n interest rates have proven effective in moderating price-wage spirals,and the labor market is expected to soften.Yet,securing affordable labor has become the most daunting strategic issue for business owners today.The U.S.labor market started to reset in May of 2021 when the number of open positio

11、ns outpaced the number of unemployed workers.CEOs have been forced to reevaluate their recruiting and retention strategies.For the first time,many have built out internal resources dedicated to talent Vistage Worldwide Inc.Also,inflation is compounding the effects of the competitive labor market.Whi

12、le boosting wages has been cited as the top tactic for CEOs in addressing hiring challenges,the Q3 Vistage CEO Confidence Index also revealed that rising wages and compensation are the top inflationary pressures CEOs are experiencing.11%Increased wages and compensation are the top infationary pressu

13、res for small and midsize businessesWhich efects of infation are you experiencing for your business?Source:Q3 2022 Vistage CEO Confdence Index39%43%56%63%80%91%Increased costs for business travelChanges in buyer behaviorIncreased energy pricesHigher costs for raw materials/inputsIncreased prices fro

14、m vendorsIncreased wages and Vistage Worldwide Inc.Source:ADPJan 21May 21Sep 21Jan 22May 22Sep 22Median year-over-year change in annual pay by worker typeAt the root of the torrid job market are competitors bidding up the cost of labor.In September,the average employee who had stayed in a position w

15、as earning 8%more than a year ago,while the average job switcher was earning 16%more.While the curve of wage inflation for job switchers is flattening,there is ample incentive for workers,especially younger ones,to change companies and Vistage Worldwide Inc.Median year-over-year change in annual pay

16、 by frm sizeMedian Pay Change1-19 Employees20-49 Employees50-249 Employees250-499 Employees500+EmployeesSource:ADP.comWhile larger employers(companies with over 500 employees)are paying slightly more,wage inflation has impacted businesses of every size.Companies with less than 20 employees are havin

17、g difficulty keeping pace with average wage increases in the 8% Vistage Worldwide Inc.Source:Federal Reserve BankAnnual Quit Rate by Industry%24.0%27.6%20.4%69%Construction Education and health services Finance and real estateInformation 20.4%63.6%31.2%38.4%24.0%38.4%22.8%InformationLeisure and hosp

18、italityManufacturingOther servicesProfessional&bus servicesResources and miningTrade,transportation,utilitiesWage inflation is also consistent across industries.The biggest spikes are in hospitality and warehousing,which are also the sectors doing the most hiring and experiencing high turnover.Const

19、ruction,which has been in an extended wage upcycle,may be starting to cool falling in line with other Vistage Worldwide Inc.Median year-over-year change in annual pay by industrySource:ADP.comInformationMedian Pay ChangeTrade,transformation,and utilities ConstructionOther servicesFinancial activitie

20、sEducation and health servicesNatural resources and miningLeisure and hospitalityManufacturingProfessional and business services0%2%4%6%8%10%12%14%Wage inflation will vary across sectors and geographies in part due to government action.California,often a trendsetter for wages,recently passed AB257,w

21、hich granted power to a council with the authority to raise fast food minimum wage rates to$22 an hour next year.Given that Californias exempt workers make at least double the minimum wage,a supervisor at McDonalds could make$88,000 a year in cash compensation before benefits.While wages are much lo

22、wer in other parts of the country,wage percent inflation is likely to persist for some Vistage Worldwide Inc.Women under 25 are the population sector in greatest demand,perhaps reflecting a movement toward greater equality,but also overweighing in entry-level hospitality jobs.Wages for those 24 and

23、younger are growing at almost triple the rate of older workers.Median year-over-year change by age and genderSource:ADP.comMenAge 16-240%2%4%6%8%10%12%14%16%Age 25-34Age 35-54Age 55-85W Vistage Worldwide Inc.Hybrid work environmentReturn to work and the design of their hybrid system is top of mind f

24、or many CEOs today.Employers are concluding that a flexible work environment is paramount to creating a more competitive employment offer.Those in manufacturing or other industries not suited to remote work are adjusting schedules to allow more flexibility.Studies reveal that:74%of U.S.companies pla

25、n to implement a permanent hybrid work model.55%of employees want to work remotely at least three days a week.59%of employees are more likely to choose an employer that offers remote work opportunities over one that doesnt.Companies with remote options experience 12%less turnover.54%of employees say

26、 they would change companies for one that offers more flexibility in terms of remote work.Men are twice as likely to return to the office as women.The most common reason that people want to work from home is that they feel more productive there.18%say they will not return to the office“no matter wha

27、t.”The top considerations for employers in designing a hybrid environment are health and wellness(84%),productivity(72%)and access to talent(58%).59%of employees are more likely to choose an employer that offers remote work opportunity over one that doesnt.Source:Z Vistage Worldwide Inc.Employers ar

28、e shifting toward models that provide more flexibility such as hybrid as a long-term strategy for their workforce.A recent Vistage survey of small businesses found that 47%have a hybrid workforce model,while 10%are fully remote.When CEOs with a hybrid model were asked about their plans to increase t

29、ime in the office,84%reported they do not plan to make any changes in the next 3 months.As larger companies look at return-to-office policies,small businesses may have an advantage by offering hybrid and remote work options.38%of employees say the biggest challenge to hybrid is knowing when to come

30、into the office,and why.Yet only 28%of companies have created“agreements”that formalize their protocols.In other words,many workers are confused about their employers expectations within hybrid,and they resent arbitrary rules about the frequency of when they should come into the office.Which best de

31、scribes your current workforce model?Source:October 2022 WSJ/Vistage Small Business CEO Confidence Index survey,n= Vistage Worldwide Inc.Thus,employers are forced into a trade-off many believe employee productivity is compromised by hybrid work(even if there is little evidence to support that positi

32、on),but also realize they have access to a much larger talent pool by offering hybrid.Many factors drive labor productivity,which is measured by the output per hour.For example,when unemployment spikes,as it did in 2020,productivity rose with it,as output remained roughly the same with fewer workers

33、.However,after our economy reached full employment productivity normalized,only to decline around the time people started to return to the office.Output per worker declined 2%in Q2 and improved slightly in Q3.it would appear that the economy and employers are adapting to the hybrid environment.The d

34、ata suggests that any loss in productivity is minor.Output per hour is higher than it was before the Vistage Worldwide Inc.Productivity Paranoia85%of employers believe the shift to hybrid has“made it challenging to have confidence that employees are being productive.”But that is because 36%report se

35、eing“visual cues”compared to 54%before the pandemic.This has led to a form of“productivity theatre”where workers feel they have to prove their value by leaving crumbs for their managers that illustrate their activities.81%say it is important their leaders help prioritize their workload but only 31%r

36、eport their managers provide such guidance in one-to-one meetings.Other studies suggest a significant disconnect in perceptions about productivity.While many employers believe remote employees are less productive,a Zippia study found that office workers believe they are collaborating better since th

37、e pandemic.Some activities are now far less effective,such as onboarding.One potential explanation for improved attitude about collaboration could have to do with the high adoption of tools such as Microsoft Teams,and the shift toward different work styles such as using chat threads.Efects of the pa

38、ndemic on workplace activities%of Respondents with OpinionSource:ZippiaCollaboratingon newprojectsSame as pre-COVID-19Better than pre-COVID-19Worse than pre-COVID-1939%44%17%Securing relationships with new customersCoaching employees to succeedOnboarding new hiresInnovating products or services35%35

39、%35%41%43%44%38%41%23%20%27%18% Vistage Worldwide Inc.There are also significant generational differences.Younger workers seek the communal nature of offices,while older workers(assumably many with children)favor hybrid environments.Less than 15%of workers of all ages want to be in the office five d

40、ays a week.Employee opinions on hybrid work by generation%Who Prefer This#of Weekly Remote DaysSource:ZippiaGen ZMillenialGen X and Baby BoomersFull-time remoteFull-time in-ofce3-4 remote days per week1-2 remote days per week30.4%14.7%14.7%21.4%42.2%12.7%37.8%36.4%34.5%28.3%13%13.9% Vistage Worldwid

41、e Inc.This sentiment of employees conflicts with data captured from CEOs in a recent Vistage survey.While CEOs reported that customers were least impacted,the ability to communicate and collaborate were the most impacted,which in turn has negative impacts on workplace culture as well.This suggests t

42、hat employers and employees have varying viewpoints on how well employees are collaborating in a hybrid environment.Yet many employers are utilizing the same tools they used before the pandemic.It may be that providing access to Teams and Zoom may not go far enough to enable a productive hybrid envi

43、ronment.There will need to be a corresponding behavior change,which is much harder to implement.How have the following areas of your business been impacted by remote work?Positively impactedNo impactNegatively impactedSource:Q2 Vistage CEO Confidence Index n=1, Vistage Worldwide Inc.Employee Satisfa

44、ctionFrom the CEO perspective,employee engagement is strong.For those small businesses measuring engagement,over half of CEOs report their engagement has remained the same over the past year,and nearly 4-in-10 respondents report improving rates.Just 1-in-10 small businesses measuring engagement repo

45、rted that engagement had worsened.How has your engagement changed in the past year?(Conditional to measuring engagement)ImprovedRemained the sameWorsenedSource:October 2022 WSJ/Vistage Small Business CEO Confidence Index survey,n= Vistage Worldwide Inc.Given the upheaval in the work environment,its

46、remarkable that nearly double the number of workers report they are“happier”in their environment than before the pandemic.They are experiencing better work-life balance,family life and career progression.The data leads to an astonishing conclusion.While there is a narrative among many employers that

47、 hybrid is not as productive as working in the office,their ability to attract,retain and develop employees is dramatically improved in a hybrid environment.In other words,productivity is certainly an important variable but must be tempered by the hard and soft costs of recruiting and turnover.Sourc

48、e:Qualtrics*Note:Our reference to“before the pandemic”is a result of this study being conducted in March of 2022,exactly two years after the beginning of the pandemic.Area of life%who say they are better of than they were two years agoWork-life balanceJob satisfactionCareer progress43%39%36%38%31%40

49、%who say they are worse of than they were two years ago18%20%17%27%31%19%FinancesMental health41%24%Overall happinessFamily lifeOne could ask how“productive”is the alternative if employees are saying they will separate in mass if forced to work in the office.On the heels of the pandemic and in light

50、 of the torrid job market,our paradigm must shift toward creating an environment where our employees are most likely to be retained.If our employees are so valuable that they have almost unparalleled options to change jobs,their satisfaction and balance must be considered as Vistage Worldwide Inc.Ac

51、tion PlanHere is a playbook of key actions to take as a result of this report:INVEST IN EMPLOYER BRANDINGGiven the level of competitiveness,employers need to treat recruiting and retention as a marketing function,amplifying messaging on websites and through internal communication on why they are a g

52、reat place to work.PLAN WITH A PURPOSECompanies requiring employees to come back to the office should set very specific protocols on what meetings,events and activities will occur during in-office work days.MEASURE EMPLOYEE ENGAGEMENTIf employees are truly a companys most important asset,then employ

53、ee engagement needs to be a KPI(key performance indicator).We recommend companies conduct an annual deep-dive employee engagement study and support it with quarterly pulse surveys.COMMUNICATE YOUR INTENTIONS Its critical that management teams play back employee engagement learnings through a set of

54、human capital initiatives that prove the companys commitment to improvement.RESET DIRECT LABOR COST EXPECTATIONSEmployers are facing a new reality in terms of compensation and are going to have to reset their expectations of direct labor.This is leading to difficult conversations about business mode

55、l decisions,automation and staffing.Adjust direct labor budgets accordingly.Naturally,every company should be benchmarking compensation on a regular basis.USE PROCESS TO YOUR ADVANTAGEIn the employee engagement studies we facilitate for our clients,we repeatedly hear that they are holding on to marg

56、inal workers out of desperation.Companies that can standardize processes and have operating procedures can overcome marginal Vistage Worldwide Inc.LEVERAGE COLLABORATION TECHNOLOGYTo this day,many employers have not reset their software systems within the hybrid model.For example,while many companie

57、s implemented Microsoft Teams,they are still reliant on email for internal communication.In the most productive environments,threads replace internal email.Better document management is also an opportunity for many organizations.CREATE A“PRODUCTIVITY ANYWHERE”MODELHybrid is here to stay.Some busines

58、s models(such as manufacturing)require on-premises work.But to the extent companies are able,their ability to provide flexibility has become an integral pillar in their employer value proposition.So,they must find ways to ensure employees are productive when splitting time in the office.To accomplis

59、h this,create team agreements that specify how people should work.Consider topics such as how performance management and feedback loops need to evolve,meeting etiquette,where information is stored,and how collaboration software will be utilized.Most importantly,make sure your managers are in-tune wi

60、th the needs of employees in a hybrid environment,including frequent one-to-one meetings that enable employee Vistage Worldwide Inc.References Qualtrics MicrosoftAUTHORCONTRIBUTORS Marc Emmer President,Optimize Inc.Marc Emmer is President of Optimize Inc.,a management consulting firm specializing in

61、 strategic planning.Emmer is a sixteen-year Vistage member and a Vistage speaker.The release of his second book,“Momentum,How Companies Decide What to Do Next”was covered online by Yahoo Finance,Business insider,CBS and NBC.Emmer has crafted strategic plans for over 150 organizations,including more

62、than 70 Vistage members,and is also a frequent contributor to the Vistage Research Center,Forbes and I.Joe Galvin Chief Research Officer,Vistage WorldwideAs Chief Research Officer for Vistage,the worlds leading executive coaching organization for small and midsize businesses,Joe Galvin is responsibl

63、e for providing Vistage members with current,compelling and actionable thought leadership on the top issues,topics and decisions of small and midsize business CEOs.Anne Petrik Vice President of Research,Vistage WorldwideAs Vice President of Research,Anne Petrik leads the design,deployment and analys

64、is of CEO surveys for Vistage,capturing the sentiment and practices of the Vistage CEO community.Using her analysis in collaboration with perspectives from experts and partners,Anne directs the thought leadership published by Vistage research to provide small and midsize business CEOs with insights

65、that inform on how to optimize their businesses and enhance their Vistage Worldwide Inc.About Vistage Worldwide,Inc.Vistage is the worlds largest CEO coaching and peer advisory organization for small and midsize businesses.For more than 60 years,weve been helping CEOs,business owners and key executi

66、ves solve their greatest challenges through confidential peer groups and one-to-one executive coaching sessions.Today,more than 28,000 members in 26 countries rely on Vistage to help make better decisions for their companies,families and communities.The results prove it:Vistage CEO members grew thei

67、r annual revenue on average by 4.6%in 2020,while nonmembers with comparable small and midsize businesses saw revenue decrease by 4.7%,according to a study of Dun&Bradstreet data.Learn more at .About Vistage ResearchVistage conducts original research and curates subject matter expertise from thought

68、leaders to create actionable,thought-provoking insights for leaders of small and midsize businesses.Our analysis of surveys we conduct,including the WSJ/Vistage Small Business CEO survey and Vistage CEO Confidence Index survey,informs various reports.Since 2003,Vistage has published the CEO Confiden

69、ce Index,which has been a proven predictor of GDP two quarters in advance.Vistage provides the data and expert perspectives to help SMB CEOs make better decisions.Learn more at and .About Optimize Inc.Optimize Inc.is a growth consulting firm based in Los Angeles,CA.We help companies identify their s

70、weet spot,determining what products and services to sell into what markets,and at what rate of growth.As one of the few Los Angeles firms specializing solely in strategic planning,we have crafted more than 300 strategic plans.We also help companies build capabilities in the form of capacity,sales,ma

71、rketing,human capital and technology.Specializing in strategy and strategic planning,we have been trusted advisors to senior managers for public companies,mid-market organizations,and non-profits.Our most frequently served industries include manufacturing,aerospace,consumer goods,food&beverage,and retail.