By Michael Nam
The Survey of Household Economics and Decisionmaking (SHED), part of the Federal Reserve’s Report on the Economic Well-Being of U.S. Households in 2014, shows that more Americans are feeling better off economically than in 2013.
The positive outlook on the economy extends to Black and Hispanic populations, as well as millennials. For businesses looking to recruit and retain top talent, workers that feel more secure about their future present challenges.
According to the survey, Black and Hispanic views on economic outlook have, compared to 2009, improved significantly, even in relation to views of white Americans:
Percentage of Respondents That Feel Better Off Than in 2009
|2013 SHED||2014 SHED|
There are certainly major issues for many households making less than $40,000, without college educations and lacking sufficient emergency and retirement funds. Yet the tide of optimism appears to be growing, as 29 percent of surveyed respondents had a higher expectation of income in the future compared to 21 percent overall in 2013.
Broken down by age, young people in the survey, between the ages of 18 and 29, are particularly optimistic about their future income status:
Younger individuals are the most optimistic about their future income trajectory, with 39 percent of those under age 30 believing their income will increase in the year after the survey
The figure correlates well with recent Pew Research that shows millennials are generally optimistic about the way things are going in the country, with 41 percent showing a positive outlook.
Workers have reasons for optimism with a modest uptick in the consumer confidence index and the unemployment rate holding steady under 6 percent. But it should be noted that the expectation of higher pay is still an expectation of higher pay. Depending on the kind of recruitment pipeline and retention programs a company has in place, it will still likely cost more to bring and keep employees on board.
As DiversityInc notes, reputation management is key to modern day recruitment and retention of talent:
Companies that make diversity a priority are winning the war for talent. Not only are they recruiting people from underrepresented groups at a faster rate, but studies show young peopleincluding straight, white, able-bodied menwant to work at inclusive workplaces.
While the Federal Reserve survey does show an expectation of appropriate compensation, businesses also need to take firm, proactive steps to create an inclusive and inviting workplace:
Companies that have strongly stated inclusive morals and act decisively to stand up for them are more attractive to recruits, according to the study’s findings. In recent days, that would includeEli Lilly and Company,Cummins,Anthem,Marriott InternationalandMonsanto, all of whom vehemently opposedIndiana’s anti-gay Religious Freedom Restoration Act.
The stakes are high for businesses keeping up with employee expectations. Growing optimism among workers means an added pressure on companies to truly invest in their talent. As Enrico Moretti discussed in his address on the geography of jobs, “the single most important factor that drives success, not just in communities but also in companies, is the human capital in the work force.”