Despite a struggling economy and tepid labor market, confidence among U.S. employees has remained surprisingly positive and fairly consistent. In fact, over the past 12 months, employee confidence has remained above the 50 threshold mark, indicating employees overall have been relatively positive about the economy and jobs, according to Randstad’s January Employee Confidence Index.
But what does this tell us about the economy, the labor market, and what we can expect for 2013?
We see employee confidence as a clear indicator of what’s happening on the front lines of the employment market. Employees, both full-time and temporary, have unique visibility into the mood of employers—whether they’re optimistic, pessimistic, or on stand-by. From understanding the overall mood or business climate of their employers, many of these employees possess insights of employer intentions on whether they might hire or fire, grow or shrink, reconfigure, or remain at status quo. By tapping into this knowledge, we can often gain deeper understanding of what’s happening in both the labor market and economy and better manage what’s to come.
For example, our latest Index shows a decrease of 3.3 points in January to 52.1. This suggests workers may be feeling uncertain about the job market and the economy due in large part to higher payroll taxes and the ongoing federal budget negotiations. In fact, only 26 percent of employees surveyed believe the economy is getting stronger, down five percentage points from December’s number.
As employee confidence decreases, there is the potential it will negatively impact consumer confidence, spending,and workers’ potential career plans. In January, more than half (54 percent) of workers surveyed reported they are likely to stay at their current job — up two percentage points over December 2012. Likewise, 53 percent report believing there are fewer jobs available compared to only 46 percent who shared this sentiment last month. This indicates workers are somewhat more hesitant to make a move right now.
While many workers are still hesitant to make a career change, they do report being increasingly confident about their current employers, and they aren’t as worried about their own job security. A majority (72 percent) feel secure in their current jobs. Moreover, 61 percent expressed slightly higher confidence in the future of their current employers, two percentage points higher than December’s reading. Perhaps as companies begin to reinvest, employees may begin feeling more secure in an environment of longer-term planning.
This shift is already visible in certain industries such as retail, manufacturing and healthcare, as well as increased activity in the housing market. Many of these industries are anticipating continued growth, even in the midst of changes to taxes and spending cuts. While there is significant positive momentum taking place as we move into 2013, we expect to see more ups and downs in worker confidence as the economy continues to improve. Understanding employee confidence levels will continue to be a valuable tool for planning and managing the ever changing employment situation.