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CFO Corner: Is Your Economic Glass Half-full or Half-empty?

Pig half full
Evan Rodd, PayScale

PayScale’s 2013 Compensation Best Practices Report showed some of the most positive figures we’ve seen in some time. Wages are up across the board for companies of all sizes, and many organizations are beginning to hire for various positions — news which is undoubtedly exciting for job seekers. Those who are currently employed were also given a reason to smile, as 85 percent of companies expect to issue raises in the coming months.

What's Up With the Economy?
2013 seems to be the year for small business. Many reported wage increases that outpaced large and medium-sized competitors, finally making expansion a feasible option. The PayScale report showed 15 percent of companies expect to hire in 2013, while 70 percent of small companies reported an expectation of increased financial performance.

Slow changes in the housing market are also worth mentioning, especially since many blame the real estate bubble as a prime cause for our economic troubles. In fact, construction wages saw a healthy spike, and reports of increased U.S. stocks are a signs of a bolstering U.S. economy.

Sunshine and Rainbows?
Unfortunately, the financial future isn’t all sunshine and rainbows. Conversations around government spending have been a concern for economists, not to mention that Fiscal Cliff fiasco. While we didn’t fall off the edge, organizations are still keeping a watchful eye on Washington, as many Americans are wary of upcoming tax increases and government spending. Rising gas and oil prices are also a cause for concern. While wages in gas, oil, and energy are on the rise, some worry about the consequences that could result from inflation in the overall cost of energy.

Finding a Good Job Fit Isn't Easy
Companies looking to hire are taking all of this news into consideration when it comes time to hire. While there seems to be an abundance of job seekers, 67 percent of companies are having a difficult time filling skilled positions, while others are growing increasingly concerned about employee retention. Many industries that experienced wage increases also expressed a greater need for qualified candidates.

This could be part of the reason some job seekers are still having a difficult time securing positions — skilled labor is more in demand than ever before, and many companies are reluctant to make ill-informed hiring decisions should the economy head south again. Many who are still unemployed have reported increasingly exorbitant job qualifications during the application process.

Good Compensation Strategies Make For Greener Pastures
No one said the road to economic recovery would be easy, but overall we seem to be headed for greener pastures. Companies looking to hire, or retain employees are encouraged to re-evaluate compensation strategies, specifically those that fear top talent may be looking to jump ship. It’s important to know what the market is paying for specific jobs, or to be able to offer market premiums for highly skilled positions. With data on your side, you can have more confidence in your hiring decisions to ensure continued success should those numbers start to fall again. Also, making it clear that you offer a market premium is helpful when navigating a shallow talent pool. 

What about you? Is your opinion of the economy leaning more towards half-full or half-empty thinking?

  

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