Considerable increases in the chance of a promotion or raise bolster worker confidence index to highest level in five years.
Led by significant increases in perceived likelihood of a promotion and perceived likelihood of a raise, American workers’ confidence increased for the fifth consecutive quarter, according to the national Worker Confidence Index, a survey of U.S. workers from HRO Today Magazine and talent and outsourcing company Yoh.
The index gauges workers’ perceptions of the four key drivers 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 104.5 in the fourth quarter of 2016 to 107.6 in the first quarter of 2017. Despite perceived job security and trust in company leadership dipping slightly between the end of 2016 and beginning of 2017, perceived likelihood of a promotion and perceived likelihood of a raise grew dramatically, increasing by an average of 10.2 points.
“It should be comforting for business leaders to see that their employees are feeling confident in the workplace,” said Andy Roane, vice president of recruitment process outsourcing for Yoh. “However, this sets up additional challenges for companies looking for talent during a time of relatively low unemployment. Happy, content workers are harder to recruit away from their current employer.”
“It’s critical that companies, regardless of their size or health of the business, make employee well-being a priority,” Mr. Roane said. “In order to retain and recruit the best employees in today’s competitive talent dynamic, they must take a proactive approach to crafting a work experience, start to finish, that’s tailored to the demands of today’s workers.”
Worker Confidence Index
What’s Driving the Results
The report asked do you feel it likely that you will involuntarily lose your job or that your job will be eliminated in the next 12 months? Nearly 12 percent of respondents indicated that they felt that they were likely to lose their job, an increase of 1.8 percentage points from the fourth quarter and the second consecutive quarterly increase. Likelihood of job loss is 3.3 percentage points above the level from one year ago.
Both males and females felt less secure about their positions than they did in 2016. The percentage of males who felt that they would lose their job increased in the first quarter of 2017 to 13.7 percent from 12.7 percent in the prior quarter. Female concern over job security grew even more quickly, up 2.5 percentage points from last quarter to 9.9 percent.
Young professionals between 25-44 years old were the least secure in the first quarter, reporting the biggest increase in concern about job loss. In the first quarter of 2017, the youngest and the oldest respondents gained more confidence about job loss, while confidence among those in the middle fell.
In terms of race, whites remained the most confident they would not lose their jobs, with only 10.3 percent stating it was likely they would lose their job in the next 12 months, although this was up from 7.5 percent in the fourth quarter of 2016. While the likelihood of job loss for blacks increased over the last quarter by 3.5 percentage points, it remains slightly below year ago levels. Hispanics felt more secure about their jobs in the first quarter of 2017 than the fourth quarter, though less secure than they did Q1 2016.
The most highly educated generally feel the most likely to lose their jobs, and the first quarter of 2017 is no exception. But there was a sharp increase in the first quarter to 17.3 percent, up 6.2 percentage points over the prior quarter and 8.1 percentage points over one year ago.
Likelihood of a Promotion
When the report asked do you feel you’ll receive a promotion from your current employer over the next 12 months? There was an increase in optimism about the likelihood of a promotion in the first quarter, up 2.2 percentage points to 22.3 percent from the fourth quarter of 2016. This is the highest percentage of employees anticipating a promotion since the inception of the study, and an increase of 3.5 percentage points since the first quarter of 2016. The likelihood of a promotion index climbed 11.3 points in the first quarter, up to 115.1 from 103.8 the prior quarter.
Males remain much more optimistic in the likelihood of receiving a promotion than females, with a gender gap of 10.2 percentage points. Nearly 28 percent of males indicated that they felt that it was likely they’ll receive a promotion vs. 17.4 percent of females. The gap between genders doubled over the last year. Over the last four quarters, males’ belief in the likelihood of promotion increased 6.3 percentage points, whereas females’ increased only 1.3 percent.
Millennials were the most inclined to anticipate a promotion, with nearly 40 percent of respondents in combined age brackets reporting that a promotion is likely. The middle age segment had the biggest increase in the belief of a promotion among all age groups, with an increase of 10.1 percentage points compared to year ago, and an increase of 7.5 points since the fourth quarter of 2016. The inverse relationship between the likelihood of a promotion and age remains, meaning the older someone gets, the less likely they are to feel they will get a promotion.
During the first quarter of 2017, those making above $75,000 were the most optimistic about a promotion. The percentage of those who felt they would get a promotion increased over eight percentage points for this group. In contrast, only 18.6 percent of those making below $35,000 believed a promotion is likely, a 2.4 percentage point decline since last quarter.
Likelihood of a Raise
The report also asked do you feel you’ll receive a raise of three percent or more after your next review? Almost one-third (30.8 percent) of survey respondents indicated that they anticipated a raise of three percent or more at their next review, increasing 2.5 percentage points since last quarter. This resulted in an increase in the likelihood of a raise index to 112.7 in the first quarter, up 9.2 points from Q4 2016 and a whopping 22.4 points from a year ago.
Males were more likely than females to anticipate getting a raise, 36.7 percent compared to 25.3 percent respectively—a difference of 11.3 percentage points. The gap between male and female expectations about getting a raise has more than doubled since the third quarter of 2015, though it held steady in the last quarter. Optimism increased by about 2.5 percentage points for both males and females in the first quarter of 2017.
Younger respondents (age 44 or younger) continued to be the most inclined to feel that they will get a raise, with the optimism of those between 35 and 44 increasing 7.9 percentage points from the fourth quarter. The oldest respondents’ expectation of a raise also increased, though slightly, by 1.6 percentage points from Q4 2016.
As income increases, so does the belief in the likelihood of a raise. Overall, those with over $100,000 of annual household income were the most inclined to think they would get a raise, while those making under $35,000 were least optimistic. Since the first quarter of 2016, optimism of receiving a raise was highest for those making over $75,000, up over nine percentage points. The gap between higher income and lower income workers could be widening.
Minorities remain the most optimistic about the likelihood of getting a raise, as approximately 40 percent of both blacks and Hispanics anticipated a raise compared to only 26.9 percent of whites in the first quarter.
Trusting Your Employer
Lastly, the HRO Today Magazine and Yoh report asked do you trust your company’s leadership to make sound decisions for the company and its employees and found that trust decreased slightly by 0.9 percentage points, down to 44.6 percent of respondents indicating that they trust their company’s leadership.
While the trust in company leadership index declined to 103.4 for the quarter, it is still nearly nine points higher than the first quarter of last year. While males are more likely to trust their company leadership than females (49.5 percent vs. 40.1 percent respectively), females’ trust level decreased by nearly two percent since last quarter, restoring the same magnitude of gap between the genders that was evident the same quarter last year.
More than one-half of the respondents aged 44 or younger trust their company’s leadership, which contrasts with those over age 45. There is a clear correlation showing that as age increases, trust in a company’s leadership erodes. Over one-half (59.2 percent) of those in the 18–24 age group were likely to trust their company’s leadership vs. one-fifth (23.2 percent) of those aged 65 or more. While trust in leadership among the youngest respondents remains high, it significantly decreased since the previous quarter, down by six percent.
Trust decreased for all income categories except for the highest earning respondents. 55.6 percent of those making over $100,000 a year reported increase of trust in company leadership, up 4.8 percent since the fourth quarter of 2016.
Minorities are more trusting in their company’s leadership than whites, but the trust among blacks declined by 4.8 percentage points during the first quarter of the year. While trust in leadership among whites and Hispanics remained virtually the same as in the last quarter, all three ethnicities indicated higher trust in leadership than in the same time quarter in 2016.