A majority of middle-market companies, 66%, expect to increase hiring levels over the next six months, according to a report by RSM US LLP and the US Chamber of Commerce released Jan. 25. That’s the highest percentage since the organizations launched the report’s survey in 2015.
However, middle-market companies are concerned about talent supply, with 97% saying they expect the lack of available, qualified workers to be problematic over the next year. In addition, the report found 66% of middle-market firms anticipate some degree of difficulty staffing open positions over the next 12 months.
“The labor market is cooling but will remain tight by historical standards for the foreseeable future,” Joe Brusuelas, chief economist with RSM, said in a press release.
“The onus continues to be on middle-market companies to navigate persistent staffing challenges in pursuit of profitability,” Brusuelas said. “It is essential that firms attempt to get ahead of the curve and identify the proper mix between labor and investment capital to create the conditions under which they can grow, anticipate and meet future demand.”
Amid the lack of workers, 57% of respondents to the survey said they are planning to or are considering investing in automation or IT in the next year, and 85% of those aim to increase efficiency and productivity of employees.
However, only 12% plan to use AI as a substitute for labor.
More than half of middle-market firms, 52%, reported increased compensation in the third quarter, and 68% said they expect compensation to increase in the next six months. Middle-market executives are planning an average wage increase of 5.5% in the upcoming year.
In addition to compensation, 47% of middle-market firms offer flexible scheduling to attract employees. And 41% said they are helping employees better define career paths.
“A shrinking labor force will define the economy in 2024 and remain a key challenge for businesses for the foreseeable future,” Curtis Dubay, chief economist at the US Chamber of Commerce, said in a press release.
“To adapt, we see businesses of all sizes and sectors working with a smaller workforce by making investments in new technologies like automation and AI as well as upskilling and reskilling, embracing flexibility and filling open roles by hiring previously overlooked talent such as veterans and military spouses, formerly incarcerated individuals, individuals with disabilities and retirees seeking to re-enter the workforce,” Dubay said.
A survey for the reported included 403 respondents and took place between Oct. 2 and Oct. 20, 2023.