Employee Engagement

Looking Good, For Now

Worker confidence is up, but with an election looming, things may change.

By The Editors

Good news: Worker confidence is up and it’s likely driven by increases in compensation. The worker confidence index (WCI) from HRO Today and Yoh Recruitment Process Outsourcing reports an increase between the first and the second quarter of 2016, from 96.8 to 99.7. The uptick was the result of a sizable increase in the likelihood of raise of at least 3 percent, up 12.2 percentage points.

Despite an overall increase from the first quarter, the index remains lower than the same period one year ago in two areas: the likelihood of promotion and the trust in company leadership. Since all four metrics have mostly increased for three consecutive quarters, there is reason for optimism about the third quarter of 2016, though the U.S. presidential election year does bring another level of uncertainty to the forecast.

Job security has remained relatively consistent over the past year. Women continue to report higher levels of confidence in their job security than men. In general, minorities tend to anticipate job loss more than whites. The youngest, poorest, and most educated respondents reported the highest concern about job security.

The Bureau of Labor Statistics (BLS) remains largely consistent with job security study findings. At the end of the second quarter, there were 674,000 more workers than at the end of first quarter of 2016, bringing the total to 110.9 million. There was an increase in the number of female workers by 1 percent in the second quarter and by 2 percent when comparing to the second quarter of 2015.

Optimism about the likelihood of a promotion has remained steady over the past year. Results show that men are consistently more optimistic about receiving promotions than women. In addition, there is a strong negative correlation between age and promotion, where the older one gets, the smaller the likelihood of promotion. Those with the lowest income were the least optimistic about their chance of a promotion, whereas people with annual earnings in the middle range of between $35,000 and $100,000 were the most optimistic. In addition, whites were less likely than both minority groups to anticipate a promotion, and those with a college degree had the highest levels of optimism about receiving a promotion.

The likelihood of a raise increased in the second quarter of 2016. In fact, it was at its highest -28 percent -since the launch of the study. Men are significantly more likely than women to anticipate a raise. There was an increase of the anticipation of raise across all ages from the first quarter, with the youngest segment (18-24) the most optimistic with an increase of more than 10 percentage points. There is also a relationship between income and likelihood of a raise, where those with the earnings of $75,000 or more most likely to anticipate a raise. In addition, minorities were more likely than whites, and college graduates more likely than those with less education, to report positive expectations of a raise.

Trust in company leadership has been fairly steady over the last three quarters. Men are more likely than women to trust company leadership, though the gap is narrowing. Younger respondents are far more likely to trust leadership than older respondents. And there is an inverse linear relationship between trust and income: as income increases, so does trust. Company leaders are normally the most highly compensated employees in an organization, so in effect, respondents in the higher income segment are more likely than in other income segments to be rating themselves. People with a college education are also more likely to trust their leadership. Interestingly, minority respondents were more likely to trust leadership than white respondents.

Election years lead to uncertainty. Since 1900, the S&P 500 has, on average, fallen by 1.2 percent in year 8, with the market rising only 44 percent of the time, according to CNBC. The lack of clarity about who will be president come November isn’t good for the markets. Presidents, who are in the final year of a second term, are often less predictable than they are in previous years, which also adds to the uncertainty.

For more information from this quarter’s WCI, visit www.hrotoday.com.

Tags: October 2016

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