Workforce Challenges Ahead Says Employment Law Firm Workplace Survey

Workforce Challenges Ahead Says Employment Law Firm Workplace Survey

Employment law leader Littler have undertaken a major survey of over 450 US employers, revealing insights into layoffs and hiring practices among companies.

The survey indicates the concerns employers have about the economic headwinds ahead and the challenges they face with both hiring and layoffs.

Details of the Littler survey are illustrated in the law firm’s press release, below –

(March 8, 2023) – Littler, the world’s largest employment and labor law practice representing management, has released the results of its latest Employer Pulse Survey Report: 2023 Economic Outlook, based on responses from more than 450 in-house lawyers, C-suite executives and human resources professionals across the United States.  

As employers navigate mixed messages about the economy – persistent inflation and headline-grabbing layoffs on the one hand, a 53-year low unemployment rate and increased consumer spending on the other – the Littler report reveals the impact of these uncertain conditions on workforce management and planning. 

“Our survey finds some companies trying to avoid layoffs in favor of measures that maintain the stability of their workforces, as well as employers continuing to focus attention on keeping employees engaged and retaining talent,” saidTerri M. Solomon, shareholder at Littler.

“At the same time, nearly a quarter of respondents are conducting workforce reductions or layoffs and such measures are especially prevalent in the tech industry and other business sectors that substantially ramped up hiring to cater to the needs of consumers during the pandemic.” 

Employers are optimistic about their own businesses, but concerned about broader economic conditions 

The majority of employers surveyed (76%) expressed a high level of confidence in the current state of their own businesses – and their upbeat assessment carries through to the year ahead, with 75% highly confident about the state of their businesses 12 months from now. 

At the same time, however, respondents are worried about how the uncertain economic outlook and/or a potential economic downturn will impact their workforce management and planning. More than three-quarters (77%) of respondents expressed concern on that front – either to a large (22%) or moderate (55%) extent.  

Technology industry respondents expressed more concern than any other sector, with 87% concerned to a large or moderate extent (30% and 57%, respectively) – results that come amid high-profile reports of layoffs and hiring freezes in the sector. Healthcare and retail and hospitality respondents weren’t far behind, with 82% of both groups saying they were concerned to a large or moderate extent. Fewer manufacturing executives (70%) expressed such concern about economic conditions.  

Economic uncertainty drives caution in hiring, but layoffs are not yet widespread  

While nearly a quarter of respondents (24%) say they have implemented workforce reductions / layoffs or are in the process of doing so, the more interesting finding may be the lack of layoffs: 6 in 10 respondents say they are not planning or even considering them, while 50% of respondents say they are either currently, planning on or considering growing their workforces. 

The high percentage of employers avoiding layoffs could reflect lessons learned from the pandemic and a fiercely competitive talent market. “During the first few months of the initial COVID-19 outbreak, thousands of employers engaged in mass furloughs or layoffs due to business shutdowns,” said Solomon. “Many employers have clear memories of being short-staffed and unable to hire up again quickly when businesses began to reopen in mid-2020.” 

However, the survey data also reflects the prevalence of tech-sector layoffs in the headlines as 60% of tech industry respondents said their organizations have conducted, or are conducting, workforce reductions or layoffs.

That compares to 29% in healthcare, 21% in retail and hospitality, and 19% in manufacturing. More tech industry respondents also say their organizations have instituted hiring freezes (29%, compared with 20% of all respondents). 

With regard to company size, more large employers have conducted layoffs (36%) than their smaller counterparts (14%), as well as hiring freezes (28% versus 16%, respectively). Additionally, smaller businesses appear more keen on increasing their workforces (35% said they are currently looking or planning to do so, versus 28% of large companies). 

The resulting picture is one of employers caught between the need for caution as they steer through economic headwinds and a need to retain talent and grow to position their businesses for future success. For instance, the vast majority of employers surveyed view both recruiting and retention (94%) and employee engagement (95%) as a medium or high priority for their organizations. 

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