June 21, 2019 – American worker confidence is at its highest level in four years. Following a slight dip at the end of the last quarter, the national Worker Confidence Index (WCI) rose 3.6 points to 110.7 in its most recent quarter, reaching its highest level since the study’s inception.
The Worker Confidence Index is a survey of U.S. workers from HRO Today Magazine and Yoh, the international talent and outsourcing company owned by Day & Zimmermann, which gauges workers’ perceptions of the four key aspects of worker confidence: the perceived likelihood of job loss, the perceived likelihood of a promotion, the perceived likelihood of a raise and the perceived overall trust in company leadership.
Overall, the index grew from 107.1 to 110.7. This is the third consecutive year in which the WCI set a record for its highest score to date. Of the WCI’s four indexes, the job security index was the only index to report a quarterly decrease. The remaining three – likelihood of a promotion, likelihood of a raise and trust in company leadership indices – all increased. On a year-over-year basis, all four indices increased for only the third time in study history.
Americans’ perceived likelihood of a promotion saw the biggest jump. Perceived likelihood of a raise saw the second-largest. Perceived job security and trust in company leadership saw minor falls and rises, respectively.
“While companies can be satisfied knowing their current employees are content in their roles, it does provide significant challenges in recruiting,” said Kathleen King, senior vice president, enterprise solutions, Yoh. “In times of low unemployment when a majority of employees are confident in their jobs and futures, it becomes more difficult than ever to attract new talent and recruit workers away from competitors.”
“In order to retain and recruit high-performing, highly talented employees in today’s competitive market, organizations must take a proactive approach to recruiting and employee nurturing by augmenting their own recruiting and staffing efforts with talent partners who can help craft a recruiting strategy built for long term success,” she said.
Likelihood of a Raise
Both men and women continue to feel more confident about getting a raise, with 36.5 percent of men and 25.8 percent of women anticipating a raise of at least three percent at their next review – leading to the highest recorded confidence in a raise since the study was created in 2015.
And while men continue to feel more confident in a promotion than women – a trend that has happened every quarter of the study – both genders felt more confident in a title change during the past quarter than they ever have in the history of the WCI. Respondents with annual incomes over $100,000 said they felt the most optimistic about the likelihood of promotion, with 29.1 percent believing a promotion was likely.
Trust in Company Leadership
Workers were also asked: “Do you trust your company’s leadership to make sound decisions for the company and its employees?” Respondents reported that the credibility of CEOs increased by two percentage points in 2019 to 47 percent. Those findings mirrored the WCI, which showed an increase in trust in company leadership during the last quarter from 103.3 to 105.5.
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During the quarter, the job security index dropped by 2.6 points to 102.6, very near the study’s index average of 102.8. Women continued to report higher levels of job security confidence than their counterparts, with the percentage of men who felt that they would lose their job increasing last quarter from 10.3 percent to 12.9 percent, driving the overall decline in perceived job security.
CEO Confidence Wains
Meanwhile, global CEO confidence fell last quarter to its lowest level in seven years, but chief executives remained confident about growth prospects in the U.S., according to the Conference Board. The overall measure of CEO confidence decreased to a level of 42 from 55 in the previous quarter. A reading of more than 50 reflects a greater number of positive responses than negative ones.
“Looking ahead, CEOs have grown apprehensive about growth prospects for the U.S., while sentiment regarding China and Europe has grown more pessimistic,” said Lynn Franco, senior director of economic indicators at the Conference Board. “India remains a bright spot, with CEOs mildly optimistic about growth prospects in early 2019. Ongoing trade and tariff issues, volatility in the financial markets, cost of debt and expectations of moderating global growth are heightening concerns. If these conditions persist, we are likely to see weak confidence readings going forward.”
CEOs’ assessment of current economic conditions turned pessimistic in the fourth quarter, with only 21 percent saying conditions were better compared to six months ago, down from 49 percent last quarter. Meanwhile, about 39 percent said conditions are worse, up from less than eight percent in the prior quarter. CEOs were also much more negative about current conditions in their own industries compared to six months ago. Now, just 21 percent said conditions were better, down from 31 percent last quarter, while those who said conditions have worsened rose to 35 percent, up from 25 percent last quarter.
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Looking ahead, CEOs’ expectations regarding the economic outlook have also turned negative, the Conference Board found. Just 12 percent expected economic conditions to improve over the next six months, down from 23 percent the previous quarter. Meanwhile, about 54 percent expected economic conditions would worsen, compared to 22 percent last quarter. CEOs’ expectations regarding short-term prospects in their own industries over the next six months were also more pessimistic. Now, only 14 percent anticipated an improvement in conditions, down from 22 percent last quarter, while 44 percent expected conditions to worsen, up from 19 percent in the previous quarter.
Global Outlook Turns Negative
CEOs’ assessment of current global conditions continued to grow more pessimistic. Sentiment declined sharply for the US, although it remained in slightly positive territory. On the other hand, sentiment regarding China and Europe declined significantly over the past two quarters. The declines in Japan and Brazil have been more moderate, but both markets were still viewed negatively by CEOs. CEOs’ assessment of current business conditions in India declined marginally but overall remained slightly positive.
“I do think the decline in CEO confidence is an indicator that there remains unease among the nation’s corporate leaders that a protracted trade war — not only with China, but with Europe Canada, and Mexico — will most certainly impact economic growth, and quite possibly bring it to a halt sooner rather than later,” said Diversified Search CEO Dale Jones.
And tariffs matter, he said. “In my conversations with CEOs, there seems to still be a wait and see attitude, and a feeling that if the parties can actually be brought to the table to hammer out new trade agreements, it could end up being quite advantageous to the U.S.,” Mr. Jones said. “However, that is far from a done deal. CEO confidence is likely to further erode if some positive movement is not seen soon, particularly when it comes to the global economy, where the tumult over Brexit is weighing on investors. If there is one constant in the economy, it is that investors hate uncertainty more than anything else.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media