INDUSTRY SNAPSHOTS. Business and Professional Services
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1 INDUSTRY SNAPSHOTS Business and Professional Services 1
2 Addressing HR challenges in Business and Professional Services In the Business and Professional Services industry, companies thrive based on their success with customers. Thus, maintaining and even increasing their core value is at the forefront of their efforts. There is no doubt that employee engagement is a core value. A major factor influencing employee engagement is a benefits package that resonates with employees needs. 2
3 Industry Challenges Increasing competitive advantage and adding value to that advantage is a key challenge for Business and Professional Services company. Other challenges for this segment include employee engagement and customer satisfaction, the concern of future cyber-attacks and the negative impact for the companies, and the direction of companies over the next two years toward expansion for growth instead of cutting costs. innovation. Companies need to identify their key assets and to focus on how to protect them. Additionally, the rapidly growing and advancing IT industry is forcing companies to invest in harnessing emerging technologies and applying them to their business roadmap. Among the people challenges affecting the industry are: 2 An ongoing industry challenge is the development of IT technology, tools, and data analytics that help the organizations retain their positions in their industry, make the best fact-based decisions, and grow. However, nothing is possible if no extra efforts are placed in the right vision, mission, strategy and culture. These components act as the strategic compass for the organizations successful future. 1 In a continual move to a digital business world, the number of Internet users along with portable devices is constantly increasing and cyber-attacks are on the rise. However, in a digital world, security cannot be a hinder for progress and 41 % 33 % 27 % Of employers say managing the productivity of their workforce is their company s most important business objective. Say lack of qualified talent results in the most productivity lost within their organization. Say taking care of their employees by offering the widest range of benefits options is the most important objective of their benefits program. 3
4 HR Challenges Business and Professional Services Companies continue to be challenged in improving employee engagement. The top three drivers that the organizations should focus in order to maintain or increase employee engagement are career opportunities, brand alignment, and recognition. Companies are launching initiatives to ensure their workplace approach results in the right conditions for all members of an organization to give their best each day. The better the work environment for a company, the bigger the profits in the long run. Efforts to increase each employee s commitment to their organization s goals and values and keep them motivated to contributing to overall organizational success continues to be a high priority. 3 In addition to employee engagement, the industry faces HR challenges specific to the industry as well as to HR in general: 1. The cost of turnover Employee turnover not only means loss of productivity but the expense involved in replacing the employee. There are varying estimates on what it costs to replace an employee. Every time a business replaces a salaried employee, it costs six to nine months salary on average. For a manager making $40,000 a year, that s $20,000 to $30,000 in recruiting and training expenses. Another source predicts the cost is even more - that losing a salaried employee can cost as much as 2x their annual salary, especially for a high-earner or executive level employee. 4 4
5 HR Challenges (cont.) 2. Importance of benefits 27 percent of employers say taking care of their employees by offering the widest range of benefit options is the most important objective of their benefits program Employees lack of financial well-being These statistics give a picture of the status of employees financial well-being % Of employees would not be able to pay $1,000 for outof-pocket expenses if an unexpected serious illness or accident occurred today. 72 % Say a benefits package offering is extremely or very important to their job satisfaction. 66 % Say a benefit package offering is extremely or very important to their employer loyalty. 43 % Say improving their benefits package is one thing their employer could do to keep them in their jobs. 5
6 Trends Achieving major business growth is a major trend in this industry. For the past two decades or more, the perception was that in order for a company to improve performance and eventually grow, it had to follow a cost-cutting strategy, such as reducing company expenses and improving performance. However, the ongoing trend now is planning for expansion. Organizations are trying to identify how to take advantage of emerging or niche markets which can offer promising returns and reach new customers. 7 Other trends in the industry revolve around changing demographics and voluntary benefits: 1. Embracing millennials Instead of rejecting millennials, businesses will be embracing them. They don t work in the same way that baby boomers do, but they look for creative ways to do their job better and are constantly looking for ways to improve processes in the workforce. This leads to innovation and helps jump-start change in a company Offering voluntary benefits In the current marketplace, employees have more flexibility to seek out employment opportunities that better fit their needs and wants rather than remain in a position for its job security. In fact, 45 percent of employees say that they would be likely or very likely to look for other jobs outside their current organization within the next year. 9 6
7 Trends (cont.) As voluntary benefits have become more mainstream, they play an important role in enhancing benefits packages to satisfy employees needs. In companies of 250 5,000 employees % Offer voluntary insurance. Of employees say they would be at least somewhat likely to purchase voluntary benefits if offered by their employers. Increasingly, embracing non-traditional voluntary benefits is becoming a method of providing enhanced benefits packages. Purchasing Power s employee purchase program is one of the non-traditional voluntary benefits that supports key HR objectives by providing a no-cost, noliability benefit that gives employees a manageable, convenient way to access products and services including educational services that are often out of reach. 7
8 Citations Business Trends Survey, WGA Consulting, LLC, Sept. 24, Aflac WorkForces Report Business Trends Survey, WGA Consulting, LLC, Sept. 24, Zane Benefits Blog, Employee Retention: The Real Cost of Losing an Employee, Christina Merhar, Feb. 4, , Aflac WorkForces Report Business Trends Survey, WGA Consulting, LLC, Sept. 24, Inc., 10 Business Trends that Will Grow in 2017, Leonard Kim, Oct. 12, Society for Human Resource Management (SHRM), Employee Job Satisfaction and Engagement: Revitalizing a Changing Workforce, April Aflac WorkForces Report. About Purchasing Power We help employees who are underserved by traditional financing options access life-enhancing products and services. Employees can purchase the items they need and affordably spread payments across 12 months to give them peace of mind and control over their finances. Our pricing is transparent with no hidden fees, no interest, no credit checks. Why We Do It To improve employee financial well-being To empower people to take control of their lives To help organizations recruit and retain employees Visit us at PurchasingPower.com/Employers. Purchasing Power is a registered trademark of Purchasing Power, LLC. Other trademarks or registered trademarks used are the property of their respective owners. Pub. Date Purchasing Power, LLC. All rights reserved * Definitive 2016 customer survey responses 8
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