Keeping good employees, managing remote workforce top of mind for California, US firms: survey

Are you curious what other companies are doing to nurture company growth this year? What about changes to their employment strategies as the economy reopens?

In a new survey, Sonoma-based Nelson Staffing learned that company growth, talent acquisition and employee retention are the top challenges for both California and national businesses as life begins to transition back to pre-pandemic times.

One of the more standout findings is that 78% of the state’s employers are more concerned about employee retention than they are about talent acquisition.

“California has operated in a tight employee market for many years, and employers compete daily to attract top candidates,” said Chandra Pappas, Nelson’s executive vice president. “Once companies have good people in place, they’re incented to keep them.”

Nelson in its first-quarter ”Pulse Report” surveyed more than 150 employers throughout the state and pitted their responses against national findings.

Pappas noted that employers also realize a cost savings when they can retain solid employees.

“As a staffing and recruiting organization, we see multiple offers and counteroffers daily,” she said. “Exponentially in California (as compared to many other states), making the right hires — and retaining those hires — is far more cost efficient than backfilling roles because of employee turnover.”

Nelson’s survey participants represented both large and small organizations in multiple industries, including accounting, banking, construction, education, health care, hospitality, manufacturing and logistics, and wine and beverage, among others.

For the most part, California’s companies aligned with national trends, but there were a few key differences, particularly around the topic of remote work, according to the findings.

For example, survey responses form California employers showed they are less concerned about remote work and return-to-work issues than national respondents.

“Many California-based companies have offered remote work options for years,” Pappas said. “This is especially true with global organizations and high-tech employers, many of whom are accustomed to hiring employees across the country, or even internationally.”

Nelson for the past year has followed ongoing discussion about whether companies will return in force to their brick-and-mortar locations once the economy reopens, Pappas said.

“So we were very interested to see data showing that a full one-half (54%) of California businesses plan or are considering making changes to their physical locations,” she said. “In the North Bay, we are seeing significantly more companies returning to the offices in greater numbers than in the rest of California. We attribute this to the area’s strong manufacturing, hospitality and food production industries.”

On the national level, the survey found that 78% of businesses are planning or thinking about closing or combining locations.

The study also delved into finding out if companies are open to hiring out-of-state employees in order to acquire specialized skill sets. National employers appeared to be more interested, at 77%, than California’s employers, at 61%.

National companies also were more inclined than the state’s employers to adjust compensation for remote workers based on cost-of-living. This can be a complicated issue, even on a state level if a worker moves away from the city where the office is based, according to Bruce Sarchet, a Sacramento-based employment and labor law attorney at Littler Mendelson. He addressed the topic during a virtual webinar Nelson hosted on April 21.

For example, if a Stockton-based company has a remote worker move to San Diego, the company is obligated to pay the worker according to San Diego’s pay scale — higher than Stockton’s. Conversely, if an employee who worked in San Francisco before the pandemic is now working from home in Walnut Creek, that pay differential also must be addressed.

“Generally speaking, the law where the worker is sitting is the law which applies,” Sarchet said, adding it can be difficult to track where remote workers are physically located, but employers are obligated to ensure they know.

On that note, one of the more stark differences between the national and California responses is about employee compensation.

California employers said they would be much less likely (17%) than national employers (61%) to adjust an employee’s compensation in favor of hiring a remote worker at less pay.

“What we did not publish is that 50% of California respondents indicate they have yet to make a decision on adjusting salaries and bonuses,” Pappas said. “We think this indecision is because of the competitive labor market and that many companies are planning on a combined approach of offering both remote and brick-and-mortar options.”