NoVa biz leaders optimistic about recovery
Labor shortages remain problem, though, according to workforce index
Northern Virginia businesses are optimistic about economic recovery but are feeling the effects of labor shortages, according to the 2021 Northern Virginia Workforce Index released Wednesday by Northern Virginia Community College and the Northern Virginia Chamber of Commerce.
Fifty-one percent of employers said that they felt “somewhat optimistic” and 24% felt “very optimistic” about the economy’s prospects over the next one to three years, and 45% were “somewhat optimistic” and 35% reported being “very optimistic” about their businesses’ prospects.
“This highlights the extent to which Northern Virginia’s resiliency during the pandemic has been a product of its industry landscape and economic reliance on large firms in the professional/technical services and public sectors,” which were able to transition to remote work more easily, according to the index’s authors, allowing that the survey’s overrepresentation of businesses in these sectors could have influenced the results.
The index combines survey responses from 91 regional business leaders with labor market data. Business leaders answered the 25 questions between June 30 and Aug. 25. Those surveyed were primarily at the C-suite/executive leadership level (74%), but also included directors of human resources (12%) and other managers with knowledge regarding their business’s hiring and talent development (14%).
The survey group was based on a sampling of convenience, so companies providing professional, business, financial or other services were more represented than leisure, hospitality, food service, retail and construction sectors. Similarly, mid-size businesses (with 20 to 500 employees) were overrepresented, as were businesses in Fairfax County (making up 48% of respondents).
The survey also asked business leaders whether their businesses’ activity (orders, sales, revenue, contracts, etc.) had returned to pre-pandemic levels. Thirty-one percent answered that their business activity did not decline due to the pandemic, while 27% answered that it had returned to normal. Most (27%) whose businesses had not yet returned to pre-pandemic levels expected their recovery to take 6 months or more.
A plurality (47%) of respondents thought that their businesses would increase their levels of paid employment by less than 15%, although 43% responded that since the start of 2020, their businesses did not have a significant change in paid employment levels.
Employers are facing labor shortages, however. Half reported that hiring has been more difficult than usual since the beginning of this year, and 42% indicated that an overall shortage of candidates has been a primary barrier to hiring over the last 12 months.
“Through the Workforce Index, we found that many Northern Virginia businesses continue to face talent recruitment challenges,” Northern Virginia Community College President Anne M. Kress said during the virtual index launch event. “Now is the perfect time for employers to tap into a broader, more diverse pool of job seekers through apprenticeship programs and other alternate methods.”
The top anticipated change in hiring practices are an emphasis on diversity, equity and inclusion (66%) and the use of remote hiring (57%). Employers see remote work options (62%), flexible scheduling (59%) and generous health care benefits (59%), closely followed by generous vacation and sick time benefits (57%), as perks that have been the most successful in retaining talent.
Employers provided mixed responses to whether remote work will continue. Only 9% of respondents said that none of their employees would continue working remotely at least half the time on a permanent basis. The most chosen response, garnering 27%, was that a quarter or less of employees would remain primarily remote on a permanent basis. About a third of respondents reported that more than half of their workforce would continue working remotely most of the time. The responses largely reflect the represented industries, with most of the respondents in professional, business or financial services saying more than half of their workforce would work remotely, while goods-producing and direct-service businesses responded that fewer than half of their employees would remain remote.
The minimum level of education typically required for entry-level jobs based on survey responses was a high school diploma or less (44%), with a bachelor’s degree receiving the second-most responses (34%). Only 3% of employers responded that a graduate degree was the required level.
“It doesn’t make sense for individuals or employers to say that college is a necessary component of everyone’s skill set to work somewhere,” Paul Misener, Amazon.com Inc.’s vice president of global innovation policy and communications, said during the panel event. “It’s great if you want to get a four-year degree … but it’s not necessary. The good news is that employers are getting away from that. College remains an option and should be an option, but it shouldn’t be a necessary factor of everyone’s career and life.”
Most employers (86%) responded that general on-the-job training was the professional development benefit offered at their company, and 73% answered in-house training.
“The current moment presents an opportunity for businesses in Northern Virginia to reconsider alternate forms of recruiting and professional development/training, such as apprenticeships, internships and other work-based learning models, as a means for widening the pipeline of available talent in the region,” according to the index’s findings.