Employers are optimistic about raises and hiring in 2021, according to a new Indeed survey
The survey details employer sentiment about work-life balance, hiring, layoffs, the future of remote work, and more.
More than one year after the first confirmed US COVID-19 case, the coronavirus pandemic continues to impact the way we work, learn, interact, and more. Organizations around the country continue to operate remotely to mitigate the spread of the contagion in-house, and millions remain unemployed. On Tuesday, Indeed released a report detailing employer sentiment about the job market, anticipated hiring, the future of telecommuting, COVID-19 safety measures at work, and more.
Virtually all employers (92%) said that their employees "pulled together to weather the crisis" and a similar number of employers (87%) felt as though they supported their workers "as much as possible." Employer sentiment regarding workforce productivity and business growth remains positive. Three-quarters of employers (73%) said they felt optimistic about employee productivity and seven in 10 believe their company will grow." Challenging times can make or break relationships, and last year proved that employers and employees can and will come together when it matters," said Liz Lewis, an Indeed writer, and researcher in the press release.
About two-thirds of employers planned to allocate annual bonuses in 2021, according to a Willis Towers Watson survey published last October, and employer sentiment regarding pay raises seems equally positive for employees. More than half of employers (54%) reported feeling optimistic regarding employee salary increases in 2021, according to Indeed.
If employer optimism about the future labor market is any bellwether, hiring could see a boost in the months ahead. Compared with pre-pandemic levels, more than one-quarter of employers (27%) are planning to "hire at higher volumes" and one in five expect to hire at the same rate. One in 10 are anticipating a continuation of new hiring freezes, and 4% foresee layoffs.
The top reasons employers believe "new talent will join their companies" between now and December includes "better job security," higher wages, and the organization's "positive business outlook."
In the age of remote work and distance learning, the home serves as an office, virtual learning center, and residence for many households. As a result, the line between personal space and professional life can at times blur. The majority of employers (60%) "feel good about work-life balance moving forward." About half of employers (46%) feel as though leaders and those in managerial positions will have a "greater awareness" about "the challenges of balancing caregiving" and professional life, and a similar number (40%) anticipate increased consideration about employee mental health and wellness.
While many workforces continue to operate remotely due to the coronavirus pandemic, some companies have started to bring employees back to the traditional office in recent months. To mitigate the spread of COVID-19 on-site, organizations have leveraged a vast suite of technologies ranging from thermal imaging to artificial intelligence (AI). Virtually all of the employers surveyed (88%) said they are "ready to implement COVID-19 safety measures."
In recent months, some organizations have made long-term commitments to remote work. In the interim and post-pandemic, hybrid and remote workforces could reshape the traditional office and even cities around the county. More than half (57%) of employers anticipated increased telecommuting options.
Methodology
The Indeed report is based on an Indeed survey conducted between Nov. 13 and Nov. 20, 2020, involving 319 employers across the US, according to an Indeed representative.
The U.S. economy likely contracted at its sharpest pace since World War Two in 2020 as COVID-19 ravaged services businesses like restaurants and airlines, throwing millions of Americans out of work and into poverty.
The Commerce Department’s snapshot of the fourth-quarter gross domestic product on Thursday is also expected to show the recovery from the pandemic losing steam as the year wound down amid a resurgence in coronavirus infections and exhaustion of nearly $3 trillion in relief money from the government.
The Federal Reserve on Wednesday left its benchmark overnight interest rate near zero and pledged to continue injecting money into the economy through bond purchases, noting that “the pace of the recovery in economic activity and employment has moderated in recent months.”
President Joe Biden has unveiled a recovery plan worth $1.9 trillion and could use the GDP report to lean on some lawmakers who have balked at the price tag soon after the government provided nearly $900 billion in additional stimulus at the end of December.
“Last year was awful for the economy,” said Sung Won Sohn, a finance and economics professor at Loyola Marymount University in Los Angeles. “This was the first service industry recession in recent memory where a lot of jobs were lost.”
Economists are forecasting that the economy contracted by as much as 3.6% in 2020, the worst performance since 1946. That would follow 2.2% growth in 2019 and would be the first annual decline in GDP since the 2007-09 Great Recession.
In the fourth quarter, GDP is estimated to have expanded at a 4% annualized rate, according to a Reuters survey of economists. The virus and lack of another spending package curtailed consumer spending, and partially overshadowed robust manufacturing and the housing market.
The anticipated big step-back, following a historic 33.4% growth pace in the July-September period, would leave GDP roughly 2.3% below its level at the end of 2019. With the virus not yet under control, economists are expecting growth to further slow down in the first quarter of 2021, before regaining speed by summer as the additional stimulus kicks in and more Americans get vaccinated.
“No doubt it will be a challenging few months as the vaccines struggle to get distributed and lockdowns remain in place,” said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina. “However, as COVID gets under control, we expect growth to ratchet higher, running at around a 7% pace in the second half of the year.”
K-SHAPED RECOVERY
The services sector has borne the brunt of the coronavirus recession, disproportionately impacting lower-wage earners, who tend to be women and minorities. That has led to a so-called K-shaped recovery, where better-paid workers are doing well while lower-paid workers are losing out.
The stars of the recovery have been the housing market and manufacturing as those who are still employed seek larger homes away from city centers and buy electronics for home offices and schooling. Manufacturing’s share of GDP has increased to 11.9% from 11.6 at the end of 2019.
A survey last week by professors at the University of Chicago and the University of Notre Dame showed poverty increased by 2.4 percentage points to 11.8% in the second half of 2020, boosting the ranks of the poor by 8.1 million people.
Rising poverty is likely to be underscored by persistent labor market weakness. The Labor Department is expected to report on Thursday that 875,000 more people filed for state unemployment benefits last week, according to a Reuters survey.
About 16 million Americans were receiving unemployment checks at the end of 2020. The economy shed jobs in December for the first time in eight months. Only 12.4 million of the 22.2 million jobs lost in March and April have been recovered.
Lack of jobs and the expiration of a government weekly jobless subsidy likely restrained growth in consumer spending to about a 3% rate in the fourth quarter. Consumer spending, which accounts for more than two-thirds of the U.S. economy, notched a record 41% pace in the July-September quarter.
Renewed business restrictions likely kept spending on services subdued. Demand for goods that complement life at home probably boosted business investment, with double-digit growth expected again in the fourth quarter.
Businesses were also rebuilding inventories last quarter, which is likely to have contributed to GDP growth. But the inventory accumulation included imports, likely leading to a larger trade deficit, which subtracted from growth.
Another quarter of double-digit growth is expected from the housing market, thanks to historically low mortgage rates. Government spending was likely weak, hurt by state and local governments, whose finances have been squeezed by the pandemic.
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