Earlier this year, an RSM Middle Market Business Index special report looked at how the pandemic changed the middle market workplace and how employers restructured operations in response. However, with the balance of power shifting from employer to employee, more perspective was needed from employees. In response, RSM conducted an online survey in the fall of 2022 of over 4,000 workers in both the United States and Canada, split between middle market and large organizations. The resulting data provides a deeper understanding of how employees feel about their current employer, their role in the workplace and what factors could build greater satisfaction moving forward.
The pandemic environment forced many companies to adopt a more flexible work environment and the data shows that many employees want that flexibility to continue. In fact, U.S. middle market employees are significantly more likely than those working at larger organizations to wish they had more flexibility to set their own hours and schedule (62 percent vs. 56 percent).
In addition, U.S. middle market employees are significantly more likely than those at larger organizations to report they are actively applying for a new role outside their organization (26 percent vs. 14 percent). Compared to counterparts at larger companies, U.S. middle market employees also report that it would be easier to get a new job than to ask for a raise (54 percent vs. 47 percent).
“Instead of waiting for your employees to ask you for a raise or a promotion, you can ask them what they need to stay at your company and grow,” commented Marni Rozen, RSM’s Human Capital Consulting Leader. “People will generally tell you what they're looking for, and even opening up that dialogue and letting people know what opportunities are available is a positive step forward.”
Not surprisingly, among those who are actively looking for a new position, salary and benefits are a top theme, according to qualitative data. And while many companies initially responded to staffing shortages by increasing compensation, that may not always be the best response.
“While compensation is obviously important, it is often not the most critical thing,” said Rozen. “It doesn't necessarily solve the other issues that we're seeing that employees may find more important, such as flexibility and more autonomy over their schedules.”
In addition, increasing compensation is not always possible. But luckily, many of the additional characteristics employees want in the workplace are not tied to finances, but rather to career development. For example, according to qualitative data, knowledge/skills/opportunity is also a leading theme for U.S. middle market employees who are actively evaluating new opportunities.
“From a tactical and people perspective, focusing on career development is a win-win,” said Rozen. “Closing any potential skill gaps is important from a business perspective, but overall development is also what people are seeking. I think people would stay at an organization when they see opportunity ahead of them, they feel like they're working for something and they see a middle market company investing in them.”
Further, middle market employees were asked about what they have versus what they want at their current job. The most considerable gaps were with above-market compensation and incentive compensation arrangements. However, just below these gaps for U.S. middle market workers were defined career paths and equity/share ownership.
When asked about the elements of an ideal job, middle market workers were once again generally in agreement about what is most important. Employees believe that work-life balance, support from a supervisor/boss, fulfilling work and the potential for advancement/promotion are the most critical elements of the ideal position. Focusing on or expanding upon any or all of these characteristics presents a key opportunity for middle market organizations to stand out to employees and increase satisfaction.
“These opportunities don't have to be things that have a large dollar cost,” said Anne Bushman, Leader of Compensation and Benefits in RSM’s Washington National Tax practice. “The survey shows there are many things your employees are likely looking for that are not purely financial. There's a way to build loyalty through items that are not necessarily all that expensive.”
For example, Bushman detailed how taxes could be a compliance concern for any new employee retention strategies. “You need to make sure that you're not unintentionally increasing a tax cost that you didn't know was there,” she said. “When you do something completely different – especially when it involves compensation or benefits – you want to go in with eyes wide open about potential costs and tax requirements. It may or may not affect your decision, but it’s just another thing that you must consider up front.”
“You need to listen to the workforce because it’s such a big asset for your company. You need to understand the impact of changes to the workforce and what employees want because otherwise, you may not get that bang for your buck that you're expecting,” said Bushman. “I think the opportunity is there to attract and retain talent if you do really listen and respond accordingly.”
- Work/life balance (50%)
- Support from a supervisor/boss (49%)
- Potential for advancement/promotion (46%)
- Fulfilling work (45%)