This year’s big challenges for regional business are battling inflation, supply chain issues and labor shortages, according to the 2023 Business in the Northwest report from Washington State University’s Carson College of Business.
On the other hand, employees are working to find a middle ground between the desire for higher wages and a better work-life balance.
“This year, we’ve seen a widening gap between the perspectives of employers and employees. This gap is particularly focused on wages and benefits, given the increased cost of living,” said Chip Hunter, dean of the Carson College of Business. “With uncertainty around inflation, ongoing supply chain disruptions and a continued tight labor market, we look forward to seeing how we work in the Pacific Northwest continue to evolve post-pandemic.”
For their sixth annual report, Carson College of Business researchers surveyed more than 1,260 business leaders, employees and Gen Z workers in the Pacific Northwest about the state of business in the region and how new and existing challenges have affected them . Compared to 2019, five times as many employees and four times as many business leaders think the regional economy has declined or weakened, highlighting the uncertainty felt across industries at the onset of the pandemic. Despite the bleak outlook for the present, most employers and employees believe the future will be brighter.
Key findings
- Health and business outlook: Optimism about the business climate has not yet returned to pre-COVID levels. Looking ahead, however, both business leaders and employees are largely optimistic about the region’s economic future.
- Employees (44%) and business executives (29%) think the business climate in the Pacific Northwest has declined or steadily weakened since 2019, a fivefold increase among employees and a fourfold increase among business executives.
- Employees who think the regional business landscape is declining mostly attribute it to inflation (62%) and supply chain disruptions (53%).
- There is some optimism looking ahead to the next three years: 76% of business leaders and 55% of employees say their outlook for the Pacific Northwest economy is optimistic.
- Workforce turnover: Despite a tight job market, most business leaders think their current turnover rates are improving or staying the same as pre-pandemic levels, while employees report turnover rates at their companies are getting worse.
- The tension between employees and business leaders is most evident when it comes to how they perceive employee turnover rates and employment patterns in their companies.
- Business leaders think hiring is continuing as normal (58%), while almost half of employees say hiring has either slowed (35%) or stopped altogether (13%).
- Both business leaders and employees cite salary compensation as a major influence on their companies’ employee turnover rate.
- Two-thirds of business leaders say they want to create more jobs for their companies, but can’t offer competitive compensation that applicants will accept.
- Less time at work: When it comes to desired benefits, employees and business leaders alike want less time in a traditional work environment, putting four-day work weeks or shorter at the top of their list.
- Across the board, respondents would like to spend less time in traditional workplace settings. Specifically, four-day work weeks and remote/hybrid work opportunities were highly desirable benefits for both business leaders (about 40%) and employees (50% and 33% respectively).
- The next most desired benefits listed by employees were mental health days (53%) and jobs closer to their homes (35%).
- Benefits and compensation: As hiring has slowed, there is a disconnect between business leaders and employees in the balance between benefits and compensation. While employees are more likely to see pay rises as the most motivating incentive companies can offer, business leaders – trending with pre-Covid results – see other benefits, such as flexible working hours, as more compelling .
- As business leaders struggle to provide competitive compensation, they are instead placing greater emphasis on non-monetary benefits such as flexible work schedules (36%), job security (30%) and manageable workloads (24 %).
- However, 91% of employees say they want a higher salary at their companies while 37% say they want more flexible work hours.
- In addition to a pay raise, employees would prefer to receive other forms of monetary benefits such as company-paid health insurance (54%), paid retirement programs (35%) and guaranteed severance packages for employees across all levels (16%).
- Gen Z also has a desire for paid transportation rates and company vehicles.
- Gen Z Perspective: Gen Z employees are skeptical about employers’ willingness to invest in their long-term career development.
- Gen Z employees value professional growth, and 49% of Gen Z respondents attribute a lack of growth opportunities to increased employee turnover.
- This group, like all respondents, is also concerned by a possible period of recession or inflation, with 39% citing it as the biggest obstacle to future business success across all audiences.
- They are also more likely to report labor shortages (34%) and employee attrition (26%) as challenges for their companies compared to last year.
View the full report
