Talent management was the leading internal challenge cited by Chicago’s middle-market business leaders before the coronavirus outbreak, and it’s likely to persist after the public health crisis abates.
Responding to a survey conducted last year by the National Center for the Middle Market, 48% of the city’s C-suite executives cited talent management as a long-term challenge they expect to face over the next 12 months.
Although cash flow likely has become the most pressing concern for business leaders in recent weeks, the National Center’s Executive Director Thomas Stewart stresses that the talent challenge isn’t going away.
“Cash is probably the top [one] now, but talent is going to return in different forms,” he said, speaking on a webinar co-hosted last Thursday with the Chicagoland Chamber of Commerce, where he presented key findings from the National Center’s special report, “Chicagoland’s Middle Market.”
In recent years, historically low unemployment rates and competition from larger firms have made it difficult for middle-market organizations to hire qualified employees, particularly those with digital skills needed as companies increase their investment in information technology.
Unemployment claims have spiked due to economic fallout from the outbreak, but that won’t necessarily change hiring dynamics. The U.S. economy could pick back up as soon as the second half of this year, according to Michael Stritch, chief investment officer and national head of investments for BMO Wealth Management, who also spoke during the webinar.
In the meantime, the National Center has compiled resources, including reports and podcasts, for middle-market companies as they manage human resources, conserve cash and working capital, maintain operations and serve customers amid the disruption caused by the pandemic.
Regardless of the recovery’s timing, the expertise needed most by firms—notably, skills that can help businesses digitalize their operations—will continue to curtail growth in the middle market. “We certainly will have skills challenges, and those may change and become more severe after the coronavirus,” Stewart said.
And it’s not just recruitment; midsize business leaders say they also struggle to keep employees they have.
To retain qualified professionals, survey respondents said they’re considering adding new benefits. Increasing salaries and expanding training and education offerings topped the list. Meanwhile, 37% said they’re looking into flexible work arrangements—although, after a period of social distancing and sheltering in place, working remotely might come off less as a perk than a business imperative.
Kathryn Mulligan is the editor-in-chief of Middle Market Growth.