Shrm economic-conditions-financial-health-hiring-ca

SHRM Survey Findings: 2014 Economic Conditions—
California Overall Financial Health and Hiring
October 30, 2014

• This is Part 1 of the California results from a series of SHRM survey results about the state of jobs
and skills in the current economic condition, which relates to a SHRM survey series about the
ongoing impact of the U.S. and global recession from 2007 to 2012. California and U.S. results are
compared, and statistically significant differences are indicated in separate slides in the report.
• California results will be reported separately in three different topic areas:
» Overall financial health and hiring.
» Recruiting and skills gaps.
» Global competition and hiring strategies.
• Overall results (including industry-specific information) for 2013 can be found on our website at
http://www.shrm.org/research/surveyfindings/articles/pages/shrmpolltheongoingimpactoftherecessio
n.aspx
Economic Conditions—California Overall Financial Health and Hiring ©SHRM 2014 2
Introduction

• How is the financial health of California organizations? The majority of organizations in California
are doing well—one-quarter (26%) reported excellent financial health, and one-half (49%) indicated their
organization was in good financial health. Just 6% said their organization was doing poor financially.
» Over the past 12 months, three-fifths of California organizations had seen mild (45%) to significant
(15%) improvement in their financial health.
• Have California organizations been losing staff due to layoffs, attrition, restructuring, etc.? Over
the past year, only 5% of California organizations had lost 21% or more of their employees. Two-fifths
(40%) of organizations had lost 1% to 5% of staff, and one-quarter (26%) reported no staff losses.
• Regardless of the status of their current financial health, what actions have California
organizations taken as a result of financial challenges? Nearly two in five organizations (38%) had
not implemented any changes in the past year. For those that did, the most common strategies were to
lay off employees (32%), implement budget cuts (26%) and freeze hiring (21%).
» Organizations in California (32%) were more likely to lay off employees as a result of financial
challenges compared with the rest of the U.S. (25%).
• Regardless of the status of their current financial health, what actions have California
organizations taken as a result of financial stability or growth? One-third of California organizations
(34%) did not take any actions, but for the two-thirds that did, the most common actions were to increase
salaries (37%), provide bonuses (30%) and fill positions that had been lost (26%).
Key Findings

Key Findings (continued)
• Are organizations in California hiring? The vast majority of California organizations (95%) had hired
full-time employees in the past year, and two-thirds (67%) had hired contract/temporary workers on a
full-time basis. For part-time work, 61% had hired regular employees, whereas about one-half (52%)
had hired contract/temporary workers.
» California organizations were less likely to hire part-time employees compared with the rest of
the U.S.
• Which factors are important when considering whether to hire full-time staff? When given the
four following factors, California organizations indicated that maintaining normal business operations
(76% extremely or very important) was the most important factor, followed by organizational growth
(69%), changes in business strategy (63%) and an improved economy (34%). These results were
similar for the rest of the U.S.
• Are California organizations creating new positions or adding new duties to existing jobs? Over
the past year, California organizations were most likely to have hired direct replacements (79%), but
three in five (62%) had hired for completely new positions, with 45% indicating they had hired
replacements that required new duties.
» Additionally, two-thirds of California organizations (67%) indicated that hiring for completely new
positions had increased over the past year, and hiring replacements with new duties had
increased for 47% of organizations. California was more likely than the rest of the U.S. to have
had an increase in hiring for replacements (32% and 25%, respectively).

Key Findings (continued)
• Are California organizations requiring new skills for full-time regular positions? One-half
(50%) of organizations in California indicated that new skills—either for the position or for the
organization—were required for at least some of the full-time positions they had hired in the past
year.
• Why are new skills required for some positions? The top three reasons were due to changes in
the organization or its operations: growth (56%), new products/services (43%) and expanding
business into new markets (41%). Two in five organizations (41%) also cited changing technology
as a reason for requiring new skills. However, organizations in the rest of the U.S. (51%) were more
likely to require new skills because of changing technology compared with California.
• How difficult is it to find qualified candidates for positions requiring new skills? About two-thirds
of California organizations said it was very (15%) or somewhat (53%) difficult to find qualified
individuals for full-time regular positions requiring new skills in the past year.
• What are the most common job categories for which California organizations are hiring?
Similar to the U.S. overall findings, around one-half of California organizations had hired
administrative support staff (58%), accounting and finance professionals (52%), and managers and
executives (50%) in the past year. Over one-third had hired IT/computer specialists (39%),
customer service representatives (34%) and HR professionals (34%). The rest of the U.S. was
more likely than California to have hired hourly laborers (30% versus 24%) and skilled trade
positions (24% versus 18%) in the past yeEcaorn.omic Conditions—California Overall Financial Health and Hiring ©SHRM 2014 5

What Do These Findings Mean for the HR Profession?
• After a lengthy recession that saw the loss of more than eight million jobs, the U.S. economy is
clearly in recovery, albeit in a tempered period of growth. Three out of four respondents to the
California survey, as well as 80% in the U.S. overall, reported that their organization is either in
“excellent” or “good” financial health, an extremely positive indicator for the economy’s current
expansion.
• Despite improved conditions, many employers and sectors of the economy are still struggling.
Certain industries, such as high-tech, are seeing increased demand for their services, whereas
others—particularly government entities—continue to face budget deficits. And though hiring has
improved in the U.S. labor market overall, some employers have still been forced to cut staff to
make ends meet. One quarter of overall U.S. organizations laid off workers in response to financial
difficulties during the past 12 months, and that action was taken at a slightly higher rate among
California organizations (32%).
• Despite recent job gains, millions of positions are still going unfilled and, consequently, impeding
the growth of some employers. In July 2014, there were 4.7 million job openings in the United
States, up nearly 800,000 from the beginning of 2014, according to federal data. With millions of
people seeking work, it is clear that many jobs are not being filled due to a skills mismatch between
job seekers and open positions. Two-thirds of respondents to the California and overall U.S.
surveys indicated that they were having some level of difficulty hiring for their full-time openings.

Organizations’ Overall Financial Health
26%
California
(n = 564)
Note: Respondents who answered "don't know" were excluded from this analysis.
49%
19%
6%
30%
50%
16%
4%
United States
(n = 3,255)
Excellent Good Fair Poor

Organizations’ Change in Overall Financial Health
Compared to 12 Months Ago
15%
45%
California
(n = 549)
Note: Respondents who answered "don't know" were excluded from this analysis.
19%
17%
4%
13%
44%
22%
17%
4%
United States
(n = 3,140)
Significant
improvement
Mild
improvement
No change Mild
decline
Significant
decline

Organizations’ Loss of Regular Full-time Workforce in the
Last 12 Months due to Layoffs, Attrition, Restructuring, etc.
26%
40%
16%
California (n = 549)
Note: Respondents who answered "don't know" were excluded from this analysis. Percentages do not equal 100% due to rounding.
12%
4%
1%
31%
40%
16%
9%
4%
1%
United States (n =
3,141)
0% of staff 1% to 5%
of staff
6% to 10%
of staff
11% to 20%
of staff
21% to 50%
of staff
More than 50%
of staff

Actions Organizations Have Taken as a Result of
Financial Challenges in the Last 12 Months
38%
32%
25%
26%
21%
19%
17%
15%
17%
13%
15%
16%
12%
11%
10%
5%
6%
5%
3%
3%
4%
3%
40%
27%
11%
4%
None
Laid off employees
Implemented budget cuts
Had a hiring freeze
Frozen/reduced salaries, raises or bonuses
Cut temporary staff
Eliminated or reduced overtime
Reduced benefits or increased employee contribution
Reduced employee hours
Offered early retirement or retirement incentive
Furloughed employees, unrelated to the government shutdown
Furloughed employees because of the government shutdown
Other cuts
United States (n = 3,211)
Note: Respondents who answered "don't know" were excluded from this analysis. Percentages do not equal 100% due to multiple response options.

Actions Organizations Have Taken as a Result of
Financial Challenges in the Last 12 Months
Note: Only statistically significant differences are shown. California responses were excluded from the United States group for this analysis.
United States—California Comparison
• Organizations in California are more likely to lay off employees as a result of financial challenges compared with the
rest of the U.S.
Lay Off Employees
California (32%) > United States (25%)

Actions Organizations Have Taken as a Result of Financial
Stability or Growth in the Last 12 Months
34%
37%
32%
30%
26%
12%
11%
12%
9%
11%
10%
11%
3%
3%
1%
1%
3%
39%
33%
23%
10%
3%
None
Increased salaries
Provided bonuses
Filled positions that were lost
(e.g., due to layoffs, attrition, restructuring)
Improved benefits package
Ended hiring freeze
Increased budgets
Allowed for increased employee hours
(e.g., back to normal hours or allowing overtime)
Ended furlough
Provided back-pay for furloughed employees
Other improvements

Organizations Hiring Staff in the Last 12 Months
95%
67%
62%
61%
52%
96%
67%
52%
Full-time regular
Full-time contract/temporary
Part-time regular
Part-time contract/temporary
California
(n = 529 - 571)
United States
(n = 3,082 - 3,330)

Organizations Hiring Staff in the Last 12 Months
• In the last 12 months, organizations in California were less likely to hire part-time employees compared with the rest
of the U.S.
Part-Time Employees Hired in the Last 12 Months
California (61%) < United States (68%)

Importance of Certain Factors in Organizations’ Decision
to Hire for Full-Time Regular Positions
CA (n = 508)
U.S. (n =
2,984)
CA (n = 506)
U.S. (n =
2,890)
CA (n = 489)
U.S. (n =
2,873)
Note: Respondents who answered "don't know" were excluded from this analysis. Only respondents whose organizations were hiring full-time staff were
asked this question. Percentages may not equal 100% due to rounding.
34%
33%
29%
26%
23%
17%
13%
10%
42%
46%
40%
42%
40%
38%
21%
25%
17%
17%
15%
16%
19%
24%
34%
33%
3%
3%
8%
8%
9%
11%
17%
18%
3%
2%
8%
8%
9%
9%
16%
13%
Maintain normal business
operations
Organizational growth
Changes in business strategy
Improved economy
Extremely
Important
Very
Important
Somewhat
Important
Not very
important
Not important
at all
CA (n = 516)
U.S. (n =
3,055)

Types of Full-Time Regular Positions That Organizations
Hired in the Last 12 Months
45%
42%
62%
61%
79%
82%
Replacements (e.g., due to turnover, layoffs,
attrition, restructuring)
Completely new positions
asked this question. Percentages do not equal 100% due to multiple response options.
Replacements, but with new duties (e.g., due
to turnover, layoffs, attrition, restructuring)

Change in Hiring Certain Types of Full-Time Regular
Positions in the Last 12 Months
32%
25%
47%
45%
67%
66%
55%
62%
47%
49%
24%
26%
12%
13%
6%
6%
9%
8%
asked this question. Percentages may not equal 100% due to rounding.
Replacements (e.g., due to turnover,
layoffs, attrition, restructuring)
Replacements, but with new duties (e.g., due to
turnover, layoffs, attrition, restructuring)
Completely new positions
Increased Stayed the same Decreased
CA (n = 373)
U.S. (n =
2,254)
CA (n = 201)
U.S. (n =
1,114)
CA (n = 291)
U.S. (n =
1,655)

Change in Hiring Certain Types of Full-Time Regular
Positions in the Last 12 Months
• In the last 12 months, organizations in California were more likely to increase hiring of full-time regular positions for
replacements (e.g., due to turnover, layoffs, attrition, restructuring) compared with the rest of the U.S
Increased Hiring Full-time Regular Positions for Replacement in the Last 12 Months
California (32%) > United States (24%)

Organizations Requiring New Skills for Full-Time Regular
Positions Hired in the Last 12 Months
50%
48%
asked this question.
United States
(n = 2,445)

Reasons That Positions Require New Skills
56%
43%
44%
41%
39%
41%
33%
11%
9%
11%
10%
10%
56%
51%
33%
7%
Note: Respondents who answered "don't know" were excluded from this analysis. Percentages may not equal 100% due to multiple response options.
Only respondents whose organizations were hiring full-time positions that required new skills were asked this question.
Growth of organization
Developing or offering new products/services
Expanding business into new markets
Changing technology
Reorganization
Replacing temporary workers, part-time
employees, contractors or freelancers with
full-time positions
Merger or acquisition
Other

Reasons That Positions Require New Skills
• Organizations in California were less likely to indicate that changing technology as a reason that full-time regular
positions require new skills compared with the rest of the U.S.
Require New Skills due to Changing Technology

Level of Difficulty in Finding Qualified Individuals for Full-Time
Regular Positions That Require New Skills over the Last 12 Months
Note: Respondents who answered "don't know" were excluded from this analysis. Only respondents whose organizations were hiring full-time positions
that required new skills were asked this question. Percentages may not equal 100% due to rounding.
2%
29%
53%
15%
4%
31%
54%
12%
Very easy
Somewhat easy
Somewhat difficult
Very difficult

Types of Full-Time Job Categories Organizations Hired in
the Last 12 Months
California (n = 525) United States (n = 3,023)
Administrative support staff 58% 60%
Accounting and finance
professionals
52% 53%
Managers and executives 50% 49%
IT/computer specialists 39% 42%
Customer service representatives 34% 31%
HR professionals 34% 38%
Engineers 26% 25%
Sales representatives 25% 22%
Hourly laborers 24% 30%
Skilled trades 18% 24%
Only respondents whose organizations were hiring full-time staff were asked this question.

Types of Full-Time Job Categories Organizations Hired in the
Last 12 Months (continued)
California (n = 525) United States (n = 3,023)
Community and social service workers 12% 12%
High-skilled medical 12% 14%
High-skilled technicians 12% 15%
Hourly service workers 12% 15%
Lawyers, judges and legal support workers 11% 10%
Drivers 10% 13%
Production operators 9% 13%
Scientists 9% 7%
Educators 8% 12%
Protective service workers 4% 8%
Other 6% 5%
Only respondents whose organizations were hiring full-time staff were asked this question.

Types of Full-Time Job Categories Organizations Hired in
the Last 12 Months
• In the last 12 months, organizations in California were less likely to have hired hourly laborers compared with the
rest of the U.S.
• In the last 12 months, organizations in California were less likely to have hired for skilled trades, such as electricians,
carpenters, machinists, mechanics, welders and plumbers compared with the rest of the U.S.
Hourly Laborers
Skilled Trades

Demographics (California)

Demographics (CA): Organization Industry
Professional, scientific, and technical services 16%
Accommodation and food services, retail/wholesale trade 11%
Health care and social assistance 11%
Manufacturing 11%
High-tech 10%
Other industry 9%
Government agencies 9%
Finance, insurance, real estate and rental and leasing 8%
Educational services 7%
Construction, mining, quarrying, and oil and gas extraction 6%
Note: n = 572. Percentages do not equal 100% due to multiple response options.
Percentage

Demographics (CA): Organization Sector
Note: n = 572. Percentages do not equal 100% due to rounding.
49%
22%
17%
11%
Privately owned for-profit
Publicly owned for-profit
Nonprofit/not-for-profit organization
Government

Demographics (CA): Organization Staff Size
n = 504
28%
30%
20%
15%
7%
1 to 99 employees
100 to 499 employees
500 to 2,499 employees
2,500 to 24,999 employees
25,000 or more employees

n = 535
Demographics (CA): Other
U.S.-based operations only 67%
Multinational operations 33%
Single-unit organization: An organization
in which the location and the organization
are one and the same.
30%
Multi-unit organization: An organization
that has more than one location.
70%
Multi-unit headquarters determines HR
policies and practices
48%
Each work location determines HR policies
and practices
3%
A combination of both the work location and
the multi-unit headquarters determines HR
policies and practices
49%
Is your organization a single-unit organization or a
multi-unit organization?
For multi-unit organizations, are HR policies and practices
determined by the multi-unit headquarters, by each work
location or by both?
Does your organization have U.S.-based
operations (business units) only, or does it
operate multinationally?
n = 542
n = 398

31
SHRM Survey Findings
Survey Methodology
• 3,655 HR professionals participated in this survey from a randomly selected sample of SHRM’s
membership from the entire United States and an additional random sample from California
• U.S. respondents (including CA) = 3,335, response rate = 13%, margin of error = +/-2%
• CA respondents = 572, response rate = 10%, margin of error = +/-4%
• Survey fielded December 16, 2013 - January 16, 2014
Economic Conditions—California Overall Financial Health and Hiring ©SHRM 2014

Additional SHRM Resources
• SHRM California Resources
» http://www.shrm.org/hrdisciplines/pages/california.aspx
• SHRM Leading Indicators of National Employment (LINE)
» http://www.shrm.org/research/monthlyemploymentindices/line/pages/default.aspx
• SHRM Jobs Outlook Survey (JOS)
» http://www.shrm.org/research/monthlyemploymentindices/lmo/pages/default.aspx
• SHRM Metro Economic Outlooks
» http://www.shrm.org/research/monthlyemploymentindices/pages/metroeconomicoutlooks.asp
x
• SHRM’s Workforce Readiness Resource Page
» http://www.shrm.org/hrdisciplines/staffingmanagement/articles/pages/workforcereadiness.asp
x
• SHRM Foundation: What’s Next: Future Global Trends Affecting Your Organization, Evolution of
Work and the Worker
» http://www.shrm.org/about/foundation/shapingthefuture/documents/2-
14%20theme%201%20paper-final%20for%20web.pdf

About SHRM Research
For more survey/poll findings, visit shrm.org/surveys
For more information about SHRM’s Customized Research Services, visit
shrm.org/customizedresearch
Follow us on Twitter @SHRM_Research
Project lead:
Tanya Mulvey, researcher, SHRM Research
Project contributors:
Alexander Alonso, Ph.D., SPHR, vice president, SHRM Research
Evren Esen, director, Survey Programs, SHRM Research
Yan Dong, Survey Research Center, SHRM Research
Christina Lee, researcher, SHRM Research
Qikun Niu, intern, SHRM Research
Jennifer Schramm, manager, Workplace Trends and Forecasting, SHRM Research
Joseph Coombs, senior analyst, Workforce Trends, SHRM Research
Copy editor:
Katya Scanlan, SHRM Knowledge Center

Founded in 1948, the Society for Human Resource Management (SHRM) is the
world’s largest HR membership organization devoted to human resource management.
Representing more than 275,000 members in over 160 countries, the Society is the
leading provider of resources to serve the needs of HR professionals and advance the
professional practice of human resource management. SHRM has more than 575
affiliated chapters within the United States and subsidiary offices in China, India and
United Arab Emirates. Visit us at shrm.org.
About SHRM

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