The Ongoing Impact of the Recession—California Financial Health and Hiring

SHRM Survey Findings: The Ongoing Impact of the
Recession—California Financial Health and Hiring
April 18, 2013

• This is part one (financial health and hiring) of the California results from a series of SHRM
survey findings about the ongoing impact of the U.S. and global recession, which began in
2007. California and U.S. results are compared, and statistically significant differences are
indicated with an asterisk (*).
• Part one results (financial health and hiring) includes the following sections:
 Organizations’ financial health.
 Hiring.
 Creating completely new positions.
 Demographics.
• Part two results (recruiting and skill gaps) includes the following sections:
 Recruiting challenges.
 Skill gaps.
 Recruiting strategies.
 The Impact of strategic technological changes.
 Demographics.
• Overall and industry-specific results can be found on our website at www.shrm.org/surveys.
The Ongoing Impact of the Recession—California Financial Health and Hiring ©SHRM 2013 2
Introduction

Organizations’ Financial
Health

• What percentage of staff have organizations lost since the U.S. and global recession
began in December 2007? About one-quarter (24%) of organizations indicated they had
not lost any employees since the recession began, and 29% lost up to 5% of staff.
• What percentage of staff have organizations lost in the last 12 months? Slightly less than
one-half (46%) of organizations have not lost any staff in the past year, and one-third (34%)
reported losing up to 5% of employees.
• How does the financial health of organizations compare to 12 months ago? Over one-half
(54%) of organizations reported a mild to significant improvement; 17% reported no
change; and 29% were in a mild or significant decline.
Key Findings: Organizations’ Financial Health
California

• HR professionals in organizations that experienced layoffs will need to consider the impact
on remaining employees. With 29% of organizations reporting that they lost up to 5% of
staff during the recession and one-third (34%) reporting losing up to 5% of employees in the
last 12 months, workload issues and burnout could be a potential problem. Economic
conditions that continue to improve could lead to increased turnover.
• The improved financial health of organizations in California could mean that competition
for talented employees is likely to begin heating up—if it has not already. With over one-
half (54%) of organizations reporting mild to significant improvement in their financial
health, employees may begin to feel more confident about new seeking opportunities.
With unemployment rates for college graduates relatively low overall, competition for the
most educated, skilled or experienced workers could start to become more intense.
• Improved financial health could enable more organizations to increase their training and
education benefits. Many organizations put off investing in training during tough economic
times. As more organizations find their financial footing, an increase in investments in
training and development could follow, especially if finding job candidates to fill some jobs
proves so challenging that organizations become more focused on growing talent from
within.
Implications for HR: Organizations’ Financial Health
California

2%
8%
13%
18%
29%
29%
5%
9%
15%
17%
29%
24%
*More than 50% of staff
21% to 50% of staff
11% to 20% of staff
6% to 10% of staff
1% to 5% of staff
*0% of staff
California
(n = 452)
United States
(n = 3,236)
Since the U.S. and global recession began in December 2007, what
percentage of full-time regular jobs at your organization has been
lost (e.g., due to layoffs, attrition)? California
Note: Percentages do not total 100% due to rounding. An asterisk (*) indicates a statistically significant difference between
organizations in California compared with those in the United States.

Since the U.S. and global recession began in December
2007, what percentage of full-time regular jobs at your
organization has been lost (e.g., due to layoffs, attrition)?
California
Note: Only statistically significant differences are shown.
Comparisons by organization sector:
Percentage of organizations that lost 0% of staff
Privately owned for-profit (31%) > Publicly owned for-profit (5%)
Comparisons by organization sector
• Privately owned for-profit organizations are more likely than publicly owned for-profit organizations to have NOT
encountered staff losses (lost 0% of staff) since the U.S. and global recession began in December 2007.

In the last 12 months, from August 1, 2011, to July 31, 2012, what
percentage of full-time regular jobs at your organization has
been lost (e.g., due to layoffs, attrition)? California
Note: An asterisk (*) indicates a statistically significant difference between organizations in California compared those in with
the United States.
46%
34%
10%
7%
2%
1%
49%
33%
10%
5%
2%
1%
0% of staff
1% to 5% of staff
6% to 10% of staff
*11% to 20% of staff
21% to 50% of staff
More than 50% of staff
California
(n = 456)
United States
(n = 3,277)

In the last 12 months, from August 1, 2011, to July 31, 2012, what
percentage of full-time regular jobs at your organization has
been lost (e.g., due to layoffs, attrition)? California
Comparisons by organization staff size:
1 to 99 employees (59%) >
2,500 to 24,999 employees (27%)
25,000 or more employees (16%)
Comparisons by organization staff size
• Organizations with 1 to 99 employees are more likely than organizations with 2,500 or more employees to have NOT
encountered staff losses (lost 0% of staff) in the last 12 months.
Privately owned for-profit (49%)
Nonprofit (46%)
> Publicly owned for-profit (17%)
• Privately owned for-profit and nonprofit organizations are more likely than publicly owned for-profit organizations to
have NOT encountered staff losses (lost 0% of staff) in the last 12 months.

Compared to 12 months ago, would you say your organization's
overall financial health is improving, has not changed or is
declining? California
7%
20%
22%
38%
13%
8%
21%
17%
41%
13%
Significant decline
Mild decline
*No change
Mild improvement
Significant improvement
California
(n = 472)
United States
(n = 3,362)
Note: An asterisk (*) indicates a statistically significant difference between organizations in California compared with those in
the United States.

Compared to 12 months ago, would you say your organization's
overall financial health is improving, has not changed or is
declining? California
Significant decline
Government (21%) > Privately owned for-profit (4%)
• Government organizations are more likely than privately owned for-profit organizations to be in a significant decline
compared to 12 months ago.

Hiring

• Are organizations currently hiring? About three-quarters (76%) of organizations reported
hiring full-time employees, and one-third (34%) part-time employees. For
temporary/contract positions, 39% of organizations are hiring full-time employees, and 30%
part-time employees.
• For what types of positions are organizations hiring? Most organizations are hiring at
nonmanagement levels (70% for hourly and 64% for salaried positions), and approximately
one-half (51%) reported hiring for management positions such as directors and managers.
One-quarter of organizations (25%) are hiring at the executive/upper-management
(e.g., CEO, CFO) level.
Key Findings: Hiring
California

• An uptick in hiring could influence recruiting difficulty and eventually new-hire
compensation. With three-quarters (76%) of organizations reporting hiring full-time
employees, and one-third (34%) part-time employees, a more robust labor market is
developing. Though this change is a welcome development for California’s economy, with
a smaller pool of unemployed job seekers and more opportunities to move for those
currently in jobs, staffing for some roles could grow more challenging. Eventually this could
lead to increases in compensation packages offered to some new-hires.
• Use of contract and temporary workers will continue to be an option. Some organizations
will put off hiring employees until economic conditions further stabilize. For these
organizations, hiring temporary or contract workers may be the strategy they focus on in
the next several years.
• HR professionals will need to work with hiring managers to set realistic expectations for
filling some jobs. Hiring managers may have become acclimated to a “buyers market”
economic environment where filling many jobs was relatively easy. But with improved labor
market conditions this may no longer be the case, especially for jobs requiring in-demand
education, credentials, skills or experience. In these situations, HR professionals will need to
work with hiring managers to set reasonable expectations for how long it will take to fill
some jobs and to develop competitive compensation packages.
Implications for HR: Hiring
California

Is your organization currently hiring for any of the following types
of staff? California
Note: Percentages do not total 100% due to multiple response options.
26%
37%
38%
78%
30%
39%
34%
76%
Part-time contract/temporary
Full-time contract/temporary
Part-time
Full-time
California
(n = 489)
United States
(n = 3,480-3,481)

Is your organization currently hiring full-time or part-time staff?
California
• Organizations with 100 to 2,499 employees are more likely than organizations with 1 to 99 employees to be currently
hiring full-time staff.
Comparisons by organization staff size: Full-time staff
100 to 499 employees (80%)
500 to 2,499 employees (91%)
> 1 to 99 employees (60%)
• Organizations with 500 to 2,499 or 25,000 or more employees are more likely than organizations with 1 to 499 employees
to be currently hiring part-time staff.
• Organizations with 2,500 to 24,999 employees are more likely than organizations with 1 to 99 employees to be currently
hiring part-time staff.
Comparisons by organization staff size: Part-time staff
500 to 2,499 employees (56%)
>
2,500 to 24,999 employees (48%) > 1 to 99 employees (17%)

Is your organization currently hiring full-time or part-time
contract/temporary staff? California
• Organizations with 500 or more employees are more likely than organizations with 1 to 99 employees to be currently
hiring full-time contract/temporary staff.
Comparisons by organization staff size: Full-time contract/temporary staff
500 to 2,499 employees (59%)
2,500 to 24,999 employees (52%)
Comparisons by organization sector: Full-time contract/temporary staff
Publicly owned for-profit (57%) > Privately owned for-profit (32%)
• Publicly owned for-profit organizations are more likely than privately owned for-profit organizations to be currently hiring
full-time contract/temporary staff.
Comparisons by organization sector: Part-time contract/temporary staff
Government (69%) > Privately owned for-profit (21%)
• Government organizations are more likely than privately owned for-profit organizations to be currently hiring part-time
contract/temporary staff.

At what level(s) is your organization hiring?
California
Note: Only respondents whose organizations were currently hiring full-time regular staff were asked this question. An asterisk
(*) indicates a statistically significant difference between organizations in California compared with those in the United
States.
20%
49%
70%
71%
25%
51%
64%
70%
*Executive/upper
management
(e.g., CEO, CFO)
Management
(e.g., directors, managers)
*Nonmanagement
salaried employees
Nonmanagement
hourly employees
California
(n = 371)
United States
(n = 2,722)

Is your organization currently hiring nonmanagement hourly or
management (e.g., directors, managers) employees? California
• Organizations with 100 to 499 and 2,500 or more employees are more likely than organizations with 1 to 99 employees to
be currently hiring nonmanagement hourly employees.
Comparisons by organization staff size: Nonmanagement hourly
2,500 to 24,999 employees (83%)
• Organizations with 2,500 to 24,999 employees are more likely than organizations with 1 to 99 employees to be currently
hiring management-level employees.
Comparisons by organization staff size: Management
2,500 to 24,999 employees (71%) > 1 to 99 employees (27%)

Creating Completely New Positions

• Are organizations creating new positions or replacing jobs lost? Of those organizations
hiring, approximately one-half (51%) primarily hired direct replacements of jobs lost,
whereas 38% hired for completely new positions. About one in 10 (11%) organizations
added new duties to the jobs lost.
 California (38%) is more likely than the U.S. (31%) to be hiring for completely new
positions, and the U.S. is more likely to be hiring direct replacements (57% versus 51%).
• Do the completely new positions hired require new and different skill sets?
 Compared with the skills required for the jobs lost since the recession began:
 Most (70%) organizations required a mixture of new skills and the same types of
skills for new positions. One in five (20%) required completely new and different
skill sets, and 10% required approximately the same types of skills.
 California (70%) is more likely than the U.S. (58%) to require a mix of new and the
same skills for new positions, whereas the U.S. is more likely to be requiring
approximately the same types of skills (23% versus 10%).
 Compared with the skills required in existing jobs (for organizations that had not lost
any jobs since the recession began):
 Three in five (60%) organizations required a mixture of new skills and the same
types of skills. Thirty-one percent required approximately the same types of skills.
Few organizations (9%) required completely new and different skills.
Key Findings: Creating Completely New Positions
California

• For California, as for most parts of the U.S., the focus in the coming decade is likely to be on
replacement job fillings. In the coming years, HR professionals are likely to be staffing for
replacement needs more than filling newly created positions. According to the U.S. Bureau of
Labor Statistics’ (BLS) 2010-2020 Employment Project Report, slower population growth will lead to
a decreasing overall labor force from 2010 to 2020. It projects 54.8 million total job openings in this
time period with more than half—61.6%—resulting from “replacement needs,” i.e., the need to
replace workers who retire or otherwise permanently leave an occupation. Replacement needs
will exceed new job growth vacancies in four out of five occupations. Of those California
organizations hiring, approximately one-half (51%) primarily hired direct replacements of jobs lost.
• Staffing for replacement needs of jobs exited by retiring Baby Boomers may create an even
bigger staffing challenge in the years ahead. The retirement of the Baby Boomer generation will
add to replacement needs hiring. For many jobs requiring high levels of education, this change
could result in recruiting difficulty.
• If replacement needs hiring proves increasingly challenging, California HR professionals may
need to convince their hiring managers that staffing for some jobs will be more difficult than
expected. This is particularly true of STEM jobs such as engineering, science and tech jobs. HR
professionals may need to work with their organizational leaders to come up with more effective
recruitment strategies for hard-to-fill jobs.
• Jobs requiring new skills may require more organizational investment in training and
development. Though most new job openings may be due to replacement needs, many
organizations in California are hiring for completely new positions (38%) or adding new duties to
jobs that were in place pre-recession (11%). Getting new-hires up-to-speed with the needed skills
may require an investment in training and development. A greater reliance on new entrants to
the labor force to replace retiring Baby Boomers could also emphasize the need to invest in
training and development programs.
Implications for HR: Creating Completely New Positions
California

Which of the following best describes, in general, the nature of
full-time positions for which your organization is currently hiring?
California
Note: Percentages may not total 100% due to rounding. Only respondents whose organizations were currently hiring full-time
regular staff were asked this question. An asterisk (*) indicates a statistically significant difference between organizations in
California compared with those in the United States.
11%
31%
57%
11%
38%
51%
New duties added to jobs lost
(e.g., due to layoffs, attrition) since
the recession began
*Completely new positions
*Direct replacements of jobs lost
(e.g., due to layoffs, attrition) since
the recession began
California
(n = 365)
United States
(n = 2,665)

Which of the following best describes, in general, the nature of
full-time positions for which your organization is currently hiring?
California
Comparisons by organization sector: Direct replacements of jobs lost
Government (83%) > Nonprofit (37%)
• Government organizations are more likely than nonprofit organizations to be currently hiring direct replacements of jobs
lost (e.g., due to layoffs, attrition) since the recession began.
Comparisons by organization sector: New duties added to jobs lost
Nonprofit (22%) > Privately owned for-profit (3%)
• Nonprofit organizations are more likely than privately owned for-profit organizations to be currently hiring for new duties
added to jobs lost (e.g., due to layoffs, attrition) since the recession began.

Compared with the skills required for jobs lost (e.g., due to
layoffs, attrition) since the recession began in December 2007, do
these completely new full-time positions require: California
Note: Only respondents whose organizations had lost jobs since the recession began in December 2007 and were hiring full-
time staff for “completely new positions” were asked this question. An asterisk (*) indicates a statistically significant difference
between organizations in California compared with those in the United States.
23%
19%
58%
10%
20%
70%
*Approximately the
same types of skills
Completely new and
different skills
*A mixture of new skills and
the same types of skills
California
(n = 83)
United States
(n = 391)

Compared with the skills required in existing jobs in your
organization, do these completely new full-time regular positions
require: California
Note: Percentages may not total 100% due to rounding. Only respondents whose organizations had not lost jobs since the
recession began in December 2007 and were hiring full-time staff for “completely new positions” were asked this question.
5%
42%
54%
9%
31%
60%
Completely new and
different skills
Approximately the
same types of skills
A mixture of new skills and
the same types of skills
California
(n = 55)
United States
(n = 437)

Demographics

Demographics: Organization Industry
California
Note: Percentages may not total 100% due to rounding.
22%
13%
11%
9%
8%
8%
5%
2%
22%
13%
13%
14%
20%
11%
7%
10%
7%
6%
Professional services
Health
Manufacturing
State or local government
Finance
High-tech
Construction, mining, oil and gas
Federal government
Other
California
(n = 489)
United States
(n = 3,481)

Demographics: Organization Sector
California
Note: Percentages may not total 100% due to rounding.
48%
19%
17%
12%
3%
43%
17%
12%
25%
3%
Privately owned for-profit
Publicly owned for-profit
Nonprofit
Government
Other
California
(n = 473)
United States
(n = 3,294)

Demographics: Organization Staff Size
California
30%
32%
16%
14%
8%
26%
33%
19%
16%
6%
1 to 99 employees
100 to 499 employees
500 to 2,499 employees
2,500 to 24,999 employees
25,000 or more employees
California
(n = 460)
United States
(n = 3,208)

CA U.S.
U.S.-based operations
only
74% 76%
Multinational
operations
26% 24%
n = 476 (CA), 3,311 (U.S.)
Other Demographics
California
CA U.S.
Single-unit organization: An organization
in which the location and the
organization are one and the same.
34% 36%
Multi-unit organization: An organization
that has more than one location.
66% 64%
CA U.S.
Multi-unit headquarters determines HR
policies and practices
46% 50%
Each work location determines HR
policies and practices
4% 3%
A combination of both the work location
and the multi-unit headquarters
determines HR policies and practices
50% 47%
Is your organization a single-unit organization or a
multi-unit organization?
For multi-unit organizations, are HR policies and
practices determined by the multi-unit headquarters,
by each work location or by both?
Does your organization have U.S.-
based operations (business units) only,
or does it operate multinationally?
n = 478 (CA), 3,325 (U.S.)
n = 327 (CA), 2,204 (U.S.)
CA U.S.
Corporate
(companywide)
65% 68%
Business unit/division 22% 19%
Facility/location 13% 13%
n = 328 (CA), 2,206 (U.S.)
What is the HR department/function for
which you responded throughout this
survey?

• California response rate = 10%
• United States response rate = 15%
• 491(California) and 3,481 (United States) HR professionals from a randomly selected
sample of SHRM’s membership participated in this survey
• Margin of error: California +/-4%, United States +/-2%
• Survey fielded August 28 through September 14, 2012
SHRM Survey Findings: The Ongoing Impact of the
Recession—California Financial Health and Hiring
Survey Methodology

• For more survey/poll findings, visit www.shrm.org/surveys
• For more information about SHRM’s Customized Research Services, visit
www.shrm.org/customizedresearch
• Follow us on Twitter @SHRM_Research
About SHRM Research
Project leader:
Tanya Mulvey, survey research analyst, SHRM Research
Project contributors:
Alexander Alonso, Ph.D., SPHR, vice president, SHRM Research
Evren Esen, manager, Survey Research Center, SHRM Research
Jennifer Schramm, GPHR, manager, Workplace Trends and Forecasting, SHRM Research
Copy editor:
Katya Scanlan, SHRM Knowledge Center

The Ongoing Impact of the Recession—California Financial Health and Hiring

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