Top challenges facing Boston employers in 2013

Aaron Green, president of Professional Staffing Group in Boston and immediate past chairman of the board of directors at the American Staffing Association, offers a look at some of the challenges facing employers in the New Year.

Retaining talented employees

A 2012 survey by the Society for Human Resource Management on Challenges Facing HR Over the Next 10 Years found that “retaining and rewarding the best employees’’ was viewed as the top challenge by 60 percent of respondents. Employees frustrated by lack of growth, potential loss of benefits and dimming hopes of retirement will present a challenge to employers.

Developing leaders

The study also found that this year 52 percent of HR managers were concerned with developing leaders, a jump from 29 percent of respondents who named this a pressing concern in a 2010 survey.

Working Big Data into HR decisions

Data analytics, the combination of many different points of data to analyze complex business decision-making, presents promise for employers who want to anticipate and respond to future business needs using analytics-based decision support systems. With data analytics employers can crunch Big Data to understand employee needs and identify impending talent gaps. The challenge lies in sorting the ever-growing amount of data and distinguishing between what is interesting and what is important.

Managing global, flexible, and remote workers

The increase in workforces that are more mobile, practice telecommuting and/or are located offshore presents, means workers who are physically more distant and potentially less committed to the organization, presenting management and engagement challenges to employers.

Skill gap

Although the Massachusetts unemployment rate is historically high at 6.6 percent and about 230,000 workers in the state are actively seeking work, many lack the skills required by employers today and the issue is only becoming more acute.

Balancing a workforce that has increasing numbers of contract and temporary workers

An annual survey and forecast from Staffing Industry Analysts predicts that the use of temporary staffing will hit record numbers in 2013. This year, temporary hires across all industries are expected to reach 106 percent of their historical high and some sectors, such as locum tenens physicians and nurses and IT and engineering/design professionals, will far exceed the average.

Transient workforces

Employee loyalty has been on the decline over the past several years and has become a challenge for employers. Among the employed respondents to Jobvite’s 2012 Social Job Seeker survey, 69 percent said they were either “actively seeking’’ a new job or were “open to’’ a new job. That number is up from 61 percent in Jobvite’s 2011 survey. A Professional Staffing Group survey of job applicants asked respondents why they’re looking for a new job and the number one answer that is given twice as often as any other reason is that their current job lacks advancement or development opportunities.

Pay raises

Although Massachusetts media hourly wages are among the highest in the country ($19.81 per hour in 2011 and 23 percent higher than the US average), they have stagnated recently: data from the US Census Bureau’s annual American Community Survey show that median household income in Massachusetts fell to $62,859 in 2011. This is a statistically significant decline of $1,108 or 1.7 percent from the 2010 level of $63,967 (adjusted to 2011 dollars) [source: Massachusetts Budget and Policy Center]. Many workers will be looking for wage increases in 2013. Coupled with the trend of a more transient workforce, this presents a challenge to employers. In addition, two New England states will see their minimum wage rates increase this year: Vermont’s minimum wage increased to $8.60 from $8.46 per hour and Rhode Island’s increased from $7.40 to $7.75 per hour. Massachusetts won’t see a minimum wage hike right now – the rate is currently $8 per hour – but state legislators debated increasing it to $10 last summer and may take up the issue again.

Healthcare expenses

There remains uncertainty over what the federally mandated Obamacare will mean for employers. In addition, Bay State employers are struggling to fully comprehend and comply with the Massachusetts Fair Share rules.

Retail competition

The dust has barely settled on the holiday retail season, but expect 2013 to be a big year for retailers as changes come to the online retail front. In Massachusetts, online retailers are supposed to collect sales taxes if they have a physical presence in the state, which means that Amazon will start charging sales tax to shoppers from the Commonwealth in November. This could level the playing field a bit for local brick-and-mortar retailers, especially those selling big ticket items and electronics.

General uncertainty

The presidential election and congressional votes haven’t resolved our uncertainty over budgets, regulations and taxes. With many big issues unresolved, employers remain uncertain about the future and cautious about hiring and other business decisions.