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Employer Survey

In the first year of this annual study (2009), the employer survey focused on immediate impacts of the developing recession on area employers. Last year’s study was conducted during late spring of 2010 and focused on effects of the recession on business operations. This year’s examination looks at adjustments made since then and future plans for growth. To supplement Employer Survey data, qualitative case study interviews were conducted with six area employers of various employment sizes and representing six of the seven target industry clusters.

Surveyed Companies

A random sample from the 112,853 companies operating in the St. Louis MSA was generated based on a distribution across industries. During May and June of 2011, 1,218 employers were surveyed via telephone. Shown in the table is the sample size of firms per industry. These surveyed firms account for roughly one percent (range 0.77 – 1.66) of the total St. Louis MSA firms for that industry.
Survey Participants by Industry
Survey Participants by Industry Due to survey size no Mining, Utilities or Public Administration companies were surveyed. The survey sample included employers of all sizes. The results mirror the region’s distribution of employers where 97 percent have less than 50 employees.
Survey Participants by Employment Size
Survey Participants by Employment Size Almost half of the surveyed employers report an average age for their workforce of between 35 and 44 years old. There are 284 companies reporting an average age between 45 and 54 years compared to 251 who report it to be between 24 and 34 years, which supports the U.S. Census findings of an aging workforce. This aging trend is further evidenced by one quarter of participants reporting the Age of Retirement for their workforce to be over 65 years; another half of respondents report no employee retirements in the last five years; and 93 percent of those surveyed expect no more than five retirements in the next year.

Industries and Companies

On average, companies report the health of their industries to be Fair (42 percent) or Good (23 percent) on a scale of Excellent, Good, Fair, Poor or Very Poor. Survey results from Retail Trade and Professional Technical Services reveal equal percentages of companies reporting industry health/profitability as Good (21 percent) and Poor (21 percent) Construction, Arts, Entertainment and Recreation, and Other Services are the only industries that balance the scale between survey participants reporting industry health/profitability to be Fair and Poor. When asked about their individual company, over half of respondents report company health/profitability to be Good or Excellent; an additional third report it to be Fair. These results match findings reported in 2010 that individuals are more confident in the health of their company than they are of their industry.
The Financial Health/Profitability of Participants’ Companies and Industries
The Financial Health/Profitability of Participants’ Companies and Industries When asked to compare business performance in terms of revenue and sales to the past, and predictions for the future, companies are thinking positively. Over 40 percent of companies feel business performance has increased from one year ago. This is a somewhat improved outlook as compared to the outlook reported in 2010. When asked to think about future business performance 54 percent believe revenue and sales will increase in the next year and 74 percent believe they will see increases in the next five years.
Ratings of Current Revenue and Sales Business Performance
Case study participants suggest their growth will come from a variety of changes like customer awareness, increased demand and technology integration. Case study participant, Microgrid Energy, believes the Energy Solutions industry will grow as awareness and understanding of clean energy alternatives increases. Increasing demands for the research, products and services produced by the Biosciences and Health Care Science and Services industries will benefit case study participants bioMérieux, Inc. and SSM Healthcare–St. Louis. Talisen Technologies, Inc., subject of the fourth case study, believes company growth will continue as more businesses look to increase productivity and efficiency through the incorporation of Information Technology solutions into company operations. Companies are thinking positively about the future; but also recognize challenges to growth persist. Top among challenges to the continued growth of companies is Government Regulations, with one third of those surveyed choosing it (compared to one quarter reported to have chosen it in 2010). Based on open-ended survey responses, government action is seen as unpredictable by area employers. Not knowing the eventual outcomes of state and federal regulations, like healthcare reform, makes it difficult for employers to know what the future holds. Another example of government policies posing challenges comes from the Energy Solutions cluster, which relies heavily on government tax credits to help private purchasers afford the up-front costs associated with transitioning to clean energy. Uncertainty regarding the fate of various tax credits may keep companies cautious in their approach to growth and expansion. The second most elected challenge is Availability of Qualified Labor (215). Only five percent (62) of those surveyed felt The Economy poses a challenge to continued company growth. This is a small decline from the percent reported in 2010.
Rank of the Single Greatest Challenge to Continued Company Growth
Rank of the Single Greatest Challenge to Continued Company Growth Access to Capital ranks third as a challenge to growth among survey participants, which is supported by participant answers when asked, “In the past 12 months, how has your access to credit for business operations changed?” Almost three quarters (870) feel access has Remained About the Same or Decreased.

Employee Benefits

Medical Insurance is offered by 72 percent of surveyed employers. Just about two-thirds of employers offer retirement savings options like 401K/SEP or Pensions. Approximately 70 percent of those surveyed offer at least some of their workforce financial incentives above a base pay. Nearly 90 percent offer paid vacations and holidays.
Number of Participants Offering Financial Incentives
Number of Participants Offering Financial Incentives Almost three quarters of those surveyed, report that the cost of the benefits they provide has increased; but only three percent believe the fringe benefits package for any new hires will decrease compared to current packages. Over half expect the offered package to be the same as for current employees; and over 80 percent believe their package to be competitive or better than those offered by their competitors.

Employment Expansion

Employers rely on a variety of sources to inform their decisions regarding employment levels and business expansion. The most popular sources used to forecast employment needs are the St. Louis Business Journal (543 respondents), Industry Trade Journals (422) and the St. Louis Post-Dispatch (309). These and other sources help employers monitor policies and trends likely to impact operations and hiring decisions. When asked, “What barriers, if any, do you face in expanding your employment?” chief among the barriers faced by respondents are Economic Conditions, Government Policies, and a Shortage of Qualified Workers. Conversely, less than 10 percent of employers surveyed (107) feel there is a shortage of training programs to train workers with necessary skills.
Barriers to Companies Expanding Employment Levels
Barriers to Companies Expanding Employment Levels Employers are contemplating expansion. When asked about their plans regarding changes to their employment levels, 93 percent of those surveyed elected Maintaining, Increasing Slightly, or Increasing Significantly. Employers are equally likely to hire fulltime employees as they are to hire parttime labor. About a third might hire a contract worker or rely on a staffing agency. Comments from case study participants, like Lambert—St. Louis International Airport, suggest employers rely heavily on staffing/temporary agencies to help filter the applicant pool by academic requirements and prior relevant work experience. Case study participants were asked about any recent hires they had made and common themes emerged. Companies offering a precision product (Advanced Manufacturers) or new technologies (Energy Solutions) do not immediately expect the labor pool to have the unique specialized knowledge for their expected duties. Therefore, they are looking for an applicant to demonstrate creativity, ability to learn quickly and adaptability. Accordingly, Microgrid Energy has hired talent almost exclusively found through personal contact/referrals. Due to a less well defined applicant profile, companies like bioMérieux, Inc. and GSI have increased new hire probation periods to 90 days and six months, respectively, to give new hires the time necessary to learn job-specific nuances and adjust to the team dynamic.

Workforce Skills

Employer Survey respondents were asked to categorize their workforce based on three skill levels. A detailed explanation of these skill levels is available in the Methodology Section. Forty percent of firms say that more than half of their workforce is middle skill. When asked, “How do you anticipate your workforce’s middle skills changing over the next five years?” approximately two thirds report the distribution to stay the same. To examine this trend more carefully the St. Louis WIA short-term projections were filtered by each of the target industry clusters to look at the distribution of projected jobs to be filled in the next two years, based on skill level. The results, shown in the table below, for these cluster industries suggest an increasing demand for high skill workers (15,084 of the 34,052 positions to fill).
St. Louis WIA Projected Employment by Industry Cluster and Skill Level
St. Louis WIA Projected Employment by Industry Cluster and Skill Level Source: MERIC Short term projections 2010–2012 Survey participants were asked two questions regarding finding qualified talent in the St. Louis metropolitan area. When asked, “How much difficulty is there finding qualified job applicants?” two thirds report having at least some difficulty. When asked more specifically about finding applicants with low/middle/high skills the distribution appears more promising. Over half of all respondents rate the St. Louis region as Good or Excellent for finding the applicants they need with low, middle or high skills.
Rank of the St. Louis Region for Finding Applicants by Skill Level and Based on Percent of Survey Respondents
Rank of the St. Louis Region for Finding Applicants by Skill Level and Based on Percent of Survey Respondents Quantitative survey results show employers overall can fill their talent demands from regional labor pools. Additional qualitative findings from high growth industry cluster conversations suggest employers sometimes conduct national searches to fill specific, highly specialized, positions.

Talent Development

Survey participants were asked, “What method(s) do you use to help workers address your company’s needs for new or increased skill requirements?” In addition to internal staff development (On-the-job and In-house Classroom Training), case study participants report partnering with St. Louis Community College to develop curricula to certify staff in new regulation compliance, and/or to help staff qualify for advancement within a company. The partnership between education and employers is invaluable to talent development and regional growth. Grant-funded program development to meet the demands of new regulations or emerging demand is a key element of this partnership. Employers find that new graduates often have the adequate technical expertise but lack basic personal effectiveness competencies such as work ethic, discipline, critical thinking or interpersonal skills. For instance, students who come out of a clinical rotation program may not be prepared for the rigor of professional hospital environments. Over one third of employers surveyed report recent applicants lacking a Willingness and Ability to Learn and the Ability to Collaborate as part of a Team. For the emerging and quickly changing industries like Energy Solutions and Information Technology, companies must constantly help workers develop the skills necessary to keep up with innovations. This means companies like Microgrid Energy and Talisen Technologies, Inc. need applicants who demonstrate basic technical knowledge along with a willingness to learn in a team environment. bioMérieux, Inc. and regional Advanced Manufacturing employers expressed similar needs for talent willing to start in the lower skill positions and be mentored by experienced workers. To succeed in such a development model, the applicant must have the academic and professional fundamentals along with the willingness to learn company nuances.
Methods used by Companies to Train Current Workforce
Methods used by Companies to Train Current Workforce Over half of those surveyed report Poor Work Ethic, Communication/Interpersonal Skills, and Critical Thinking and Problem-Solving as shortcomings of recent job applicants. Employer responses also indicate that the applicant pool lacks prior knowledge of their industry. Due to the extreme shortage of job openings during the recovery, job seekers are applying to a wider range of occupations and industries regardless of prior qualifications or desired positions. To summarize employer comments, “soft” skills, in addition to technical knowledge, are crucial to work readiness; and all levels of education need to refocus on the wellrounded student with a strong foundation in the professional fundamentals. U.S. Businesses Dataset and Missouri Economic Research and Information Center (MERIC)