Middle Market Continues To Grow and Requires Talent To Continue To Grow
National Survey Forecasts 2019 Middle Market Business Growth
The results of a 2018 third-quarter survey by the National Center for the Middle Markets (NCMM) are forecasting continued mid-market growth in 2019. Despite the attractive prospect of a healthy middle-market business climate in 2019, the survey, called The DNA of Middle-Market Growth, cites several issues affecting mid-size business across many industries. These crucial elements include attracting and retaining staff and top management, the recruiting power to attract employees with the right skill set, hiring talented employees, and having access to an affordable workforce.
In the survey, 77% of middle-market executives consider the ability to attract, train, and retain talent somewhat to highly challenging.
31% of middle-market executives struggle to attract employees for top management level positions.
49% of middle-market executives feel they do not have a sufficient number of people to fill key leadership positions.
37% of middle-market executives say a lack of talent is constraining their growth.
From NCMM’s observations, middle-market companies lack senior management depth and succession plans. Many companies don't have the quality and number of employees necessary to replace key positions should a senior manager become ill or leave the organization. The cadre of competent employees ready to succeed vacant leadership positions is essential to build a growing organization. This tier of replacement staff can be generated with a strong succession plan and professional development program.
The future of an organization's growth will depend on the success of its employee training initiatives, its willingness to adopt new technology, and a robust employee compensation and retention program. A tightening labor market may see increased salary and wages as a short-term solution to retaining qualified employees. There are only finite resources and available funds to continue this approach. Over a long enough timeline an increase in employee wages will only serve to deplete company reserves and force the organization to do more work with less people. Inevitably, this leads to an unhappy and disloyal workforce and unpopular survival tactics like wage and hiring freezes. Long-term success can only be achieved by developing a strong and clearly-defined infrastructure of employee development, mentoring, succession planning, flexible work arrangements, reliable benefits, transparent employee communications and additional incentive or merit-based compensation programs.
To compete, an organization will need to recognize current and future skill gaps, identify its best performing middle-level and production employees and prepare them for future senior and plant supervisory positions. New technologies, tools, and ways to do business permeate the plant and office workspace. As a result, more equipment and processes will be automated. Staff will need the knowledge to operate and troubleshoot these new tools.
Shared Time Human Resources Management, Inc. (STHRM, Inc.) provides human resources consulting services that solve our clients' complex human resources issues. We work with entrepreneurial start-ups and established Fortune 500 companies in Cleveland, Northeast Ohio, and across the country.