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HR professionals are divided on prospects for economic growth.
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Your view of the economic landscape depends on where you are standing. The financial health and economic prospects of industries, organizations and individuals vary greatly. The mixed signals in the economy bring to mind that well-known glass: Is it half full or half empty? For HR professionals, the answer to this question may depend on the type of organization they work for.
When researchers at the Society for Human Resource Management (SHRM) asked 473 HR professionals how optimistic they were about economic conditions and the job market in the second quarter of 2013, the response was pretty much split down the middle. About half said they had some level of confidence in the U.S. job market and expected job growth. The other half said they were neither optimistic nor pessimistic or had some level of pessimism.
Why the divergent views? Individual HR professionals may be taking into account different signals when assessing the economy. Certainly, there are reasons to be both gloomy and hopeful.
HR professionals have seen firsthand the negative impact the long, slow jobs recovery has had on hiring, wages and working conditions. Yet they are well-positioned to see signals of improvement.
HR professionals responding to SHRM surveys are reporting an increase in voluntary turnover in some industries—generally a sign of an economy gaining steam. These survey results hint that opportunities for advancement may be improving.
At the same time, data from the U.S. Bureau of Labor Statistics show that the workforce participation rate is trending downward to its lowest level since the late 1970s. This fact, combined with disappointing jobs numbers, has done little to reassure business leaders, job seekers or economists. Slower economic conditions also prompted the International Monetary Fund to reduce its projections for global and U.S. economic growth in 2013.
HR professionals may be focusing on different economic signals simply because many are experiencing starkly divergent economic conditions depending on their companies’ industry and size.
Leaders in smaller organizations seem to be less optimistic than those in larger ones. Smaller organizations may be less able to benefit from productivity gains and may still have more trouble accessing credit, stymying profits and growth.
Meanwhile, larger organizations are most likely to be experiencing high profits, with record highs now particularly concentrated among the 100 largest companies in the Standard & Poor’s stock index.
HR professionals in these booming companies may have fewer worries about their companies’ financial stability and more funds to hire additional employees, resulting in less stress on staff. They may have more professional development resources as well as better opportunities for their own career development. The downside, of course, is that they may need to cope with higher turnover and may have a harder time competing for talent.
If and when a stronger recovery finally does take hold, optimism and buoyant economic conditions will be seen across the board. For now, however, HR professionals’ mixed views of the economy, as well as differences in the types of challenges they face, are likely to continue.
Jennifer Schramm is manager of the Workplace Trends and Forecasting program at SHRM.
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