For many, incomes have stagnated and prospects for greater income are limited, causing a sharp decline in worker confidence.
By The Editors
Current worker confidence has reversed the upward trend reported over the last year and dropped significantly in the second quarter of 2017. The Worker Confidence Index (WCI) from HRO Today and Yoh Recruitment Process Outsourcing report a decline of 7.9 points, falling back to a level of 99.7. This is the same level reported at the end of the second quarter in 2016. Of the four components of the WCI, only job stability rose by 4.5 points in the second quarter of 2017, while likelihood of promotion and likelihood of a raise declined by 21.4 points and 11.1 points, respectively. The trust in company leadership index declined by 3.4 points but remains 5 points higher than one year ago.
Workers confidence in job security rebounded to 103.7 points after a sharp decline in the first quarter of 2017. Many believe, however, that potential for advancement in their jobs has stagnated. According to the WCI, respondents have lost confidence in both the prospect of a promotion as well as the prospect of a raise of over three percent in the next 12 months.
WCI results report that both males and females felt more secure about their positions in the second quarter of 2017 than they did in the first quarter of 2017. The percentage of males who felt that they would lose their job decreased to 10.5 percent in the second quarter of 2017, down from 13.7 percent in the prior quarter. Female concern over job security declined as well; it dropped 1.9 percentage points from last quarter to 8.0 percent. Respondents under the age of 44 grew more confident about their job stability and older respondents indicated more concern; however, overall, older respondents remain more confident in their job security overall.
Just over one-quarter (27.8 percent) of respondents indicated they’d get a raise of at least 3 percent after their next review, a decline of three percentage points from the first quarter of 2017. Males were more likely than females to anticipate getting a raise, with 32.7 percent of males reporting a raise was likely compared to 23.2 percent of females. The gap between male and female expectations about getting a raise is about the same as it was two years ago in the second quarter of 2015.
As income increases, so does the belief in the likelihood of a raise. However, optimism in receiving a raise decreased the most for those earning between $75,000 and $100,000, down 10.5 percentage points from the first quarter of 2017. This group comprises 14 percent of the U.S. population.
Furthermore, study results reveal that after 35, as age increases, the belief there will be a raise of at least 3 percent after the next review declines steadily. As employees get older, more and more feel that what they make today is what they will make tomorrow.
Trust in company leadership fell again, declining by 1.5 points since last quarter, and now stands at 43.2 percent of study participants trusting their company’s leadership. While two-thirds (65.3 percent) of the youngest respondents expressed confidence in their company’s leadership in the second quarter of 2017, trust in leadership declined steadily as the age of respondents increased. One-quarter (25.1 percent) of those 65 or older report trusting company leadership.
There is still a positive correlation between trust and income; that is to say that as income increases, so does trust. This may be due to the fact that company leaders are normally the most highly compensated employees in an organization, and therefore respondents in the higher income segment are more likely than those in other income segments to be rating themselves. Furthermore, people with college educations are also more likely to trust their company’s leadership. Minority respondents were more likely to trust leadership than white respondents.
Despite low unemployment, high job security, high consumer confidence, and good corporate earnings reports, many are fearful because more respondents have stated that incomes have stagnated with the likelihood of significant growth in income low.