1. SHRM Survey Findings: 2014 Economic Conditions—California Global Competition and Hiring Strategies October 30, 2014

2. This is Part 3 of the California results from a series of SHRM survey results about the state of jobs and skills in the current economic condition, which relates to a SHRM survey series about the ongoing impact of the U.S. and global recession from 2007 to 2012. California and U.S. results are compared, and statistically significant differences are indicated in separate slides in the report. California results will be reported separately in three different topic areas:  Overall financial health and hiring.  Recruiting and skills gaps.  Global competition and hiring strategies. Overall results (including industry-specific information) for 2013 can be found on our website at http://www.shrm.org/research/surveyfindings/articles/pages/shrmpolltheon goingimpactoftherecession.aspx http://www.shrm.org/research/surveyfindings/articles/pages/shrmpolltheon goingimpactoftherecession.aspx Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 20142 Introduction

3. What strategies have California organizations been using to deal with recruiting challenges for full-time regular positions? A little more than one-half (51%) of organizations in California indicated using social media to deal with such challenges, followed by the use of a recruitment agency (44%) and collaborating with educational institutions (40%). Organizations have also applied strategies that focus on using current employees, including training existing employees to take on the hard-to-fill positions (37%) and expanding training programs to help improve skills of new hires (35%).  Organizations in California were less likely to report collaborating with educational institutions (40%) and seeking talent from nontraditional sources (24%) to deal with recruiting challenges, compared with 49% and 33% in the rest of the U.S. What recruiting strategies do California organizations cite as most effective? The most effective strategies for dealing with recruiting challenges in California included using a recruitment agency (54%), using social media (52%), expanding advertising efforts (51%) and targeting passive jobseekers (51%).  Compared with the rest of the U.S., organizations in California were more likely to cite targeting passive job seekers as an effective strategy for dealing with recruiting challenges (42% for the U.S. and 51% for California). Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 20143 Key Findings

4. Have California organizations been hiring workers from outside the U.S. for jobs that have been difficult to fill? Nearly one-quarter (23%) of California organizations have sponsored foreign nationals for H-1B visas in an attempt to fill key full-time regular positions that have been difficult to fill with qualified U.S. employees. For O visas, TN visas and other visas, the percentages were 4%, 11% and 9%, respectively. Have California organizations been hiring U.S. veterans for jobs that have been difficult to fill? One-half (50%) of organizations in California reported hiring U.S. veterans for full-time regular positions in the last 12 months, compared with almost two-thirds (64%) in the rest of the U.S. Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 20144 Key Findings (continued)

5. In their desire to find workers with skills that match their organization’s job openings, HR professionals should consider partnerships or some form of outreach with local educational institutions. Private-sector collaboration with vocational schools, which can involve developing curricula that help build skills required by local employers, has become a popular approach in some U.S. cities. Two out of five organizations in California, and nearly 50% of overall U.S. organizations, said they have collaborated with educational institutions to deal with recruiting challenges. Recent research by SHRM has shown that many employers have cut back on funding for some forms of professional and career development, such as tuition assistance and cross-training for employees. This runs counterintuitive to efforts to find properly skilled individuals for open positions, and may be due only to economic conditions that have caused some employers to tighten their budgets. Nonetheless, professional development assistance should be an important tool for HR professionals to strengthen the skills of their employees. Nearly half of California organizations (48%) and overall U.S. organizations (49%) said training existing employees for hard-to-fill positions was effective when dealing with recruiting challenges. Across all industries in the U.S., high-tech appears to have the greatest demand for highly skilled workers. The sector has been a strong performer in the U.S. economy, but HR professionals in that industry should make concerted efforts to train employees and develop partnerships to recruit and retain high-skilled workers. The high-tech industry in California (23%) and in the U.S. (20%) is the most likely to recruit globally for hard-to-fill positions. Its HR professionals, more frequently than all other sectors, also identify global competition for talent as a recruiting challenge for their organization. Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 20145 What Do These Findings Mean for the HR Profession?

6. Strategies Organizations Used to Deal with Recruiting Challenges for Full-Time Regular Positions Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 20146 Note: Respondents who answered "don't know" were excluded from this analysis. Percentages do not equal 100% due to multiple response options. California (n = 514) United States (n = 2,900) Using social media51%54% Using a recruitment agency44%39% Collaborating with educational institutions 40%48% Expanding advertising efforts 39%41% Training existing employees to take on the hard-to-fill positions 37%39% Expanding training programs to help improve skills of new hires 35%37% Targeting passive job seekers 33% Expanding geographic search region 25%30% Seeking talent from nontraditional sources (e.g., veterans, retirees) 24%32%

7. Strategies Organizations Used to Deal with Recruiting Challenges for Full-Time Regular Positions (continued) Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 20147 Note: Respondents who answered "don't know" were excluded from this analysis. Percentages do not equal 100% due to multiple response options. California (n = 514) United States (n = 2,900) Increasing retention efforts 32%37% Improving compensation28%24% Using/enhancing employee referral program 25%26% Providing monetary incentives to candidates (e.g., signing bonus) 20%19% Offering more flexible work arrangements 20%23% Improving benefits package13%14% Offering new job perks6%7% Other3% None; we are not using any of the above recruiting strategies 10%7%

8. Strategies Organizations Used to Deal with Recruiting Challenges for Full-Time Regular Positions (continued) Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 20148 Note: Only statistically significant differences are shown. California responses were excluded from the United States group for this analysis. United States—California Comparison Organizations in California were less likely to collaborate with educational institutions to deal with recruiting challenges for full-time regular positions compared with the rest of the U.S. Organizations in California were less likely to seek talent from nontraditional sources (e.g., veterans, retirees) to deal with recruiting challenges for full-time regular positions compared with the rest of the U.S. Collaborating with Educational Institutions California (40%)<United States (49%) Seeking Talent from Nontraditional Sources California (24%)<United States (33%)

9. Recruiting Strategies Organizations Feel Are Most Effective Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 20149 Note: Respondents who answered “don't know” were excluded from this analysis. Respondents were asked only about those recruiting strategies that their organizations were using and were allowed to select up to three options. Percentages do not equal 100% due to multiple response options. California (n = 20- 261) United States (n = 102-1,571) Using a recruitment agency54%51% Using social media52%51% Expanding advertising efforts 51% Targeting passive job seekers 51%42% Training existing employees to take on the hard-to-fill positions 48%49% Collaborating with educational institutions 36%37% Expanding geographic search region 35%33% Expanding training programs to help improve skills of new hires 31%37% Seeking talent from nontraditional sources (e.g., veterans, retirees) 27%

10. Recruiting Strategies Organizations Feel Are Most Effective (continued) Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 201410 Note: Respondents who answered “don't know” were excluded from this analysis. Respondents were asked only about those recruiting strategies that their organizations were using and were allowed to select up to three options. Percentages do not equal 100% due to multiple response options. California (n = 20- 261) United States (n = 102-1,571) Offering more flexible work arrangements 43%40% Improving compensation package 41% Using/enhancing employee referral program 40%42% Increasing retention efforts 35%33% Providing monetary incentives to candidates (e.g., signing bonus) 34%31% Improving benefits package20%29% Offering new job perks10%12% Other40%31%

11. Recruiting Strategies Organizations Feel Are Most Effective Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 201411 Note: Only statistically significant differences are shown. California responses were excluded from the United States group for this analysis. United States—California Comparison Organizations in California were more likely to target passive job seekers as one of the three most effective recruiting strategies compared with the rest of the U.S. Targeting Passive Job Seekers California (51%)>United States (41%)

12. Sponsorship for Foreign Nationals for Key Full-Time Positions That Are Difficult to Fill with Qualified U.S. Employees Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 201412 Note: Respondents who answered "don't know" were excluded from this analysis. Percentages may not equal 100% due to rounding. Have Recruited/Hired and Plan to Continue Have Recruited/Hired but Do NOT Plan to Continue Have Not Recruited/Hired but Plan to in the Next 12 Months Have Not Recruited/Hired and Do NOT Plan to in the Next 12 Months CA (n = 474) U.S. (n = 2,560) CA (n = 413) U.S. (n = 2,261) CA (n = 424) U.S. (n = 2,301) CA (n = 387) U.S. (n = 2,131) H-1B visas (specialty occupation workers) 23%20%8%7%2% 68%71% O visas (individuals with extraordinary ability or achievement) 4%2%1% 2%3%93%94% TN visas (Treaty NAFTA visas for Mexican and Canadian businesspeople ) 11%8%3%2% 3%84%88% Other visas 9%7%3%2%1%2%87%89%

13. Hired U.S. Veterans for Full-Time Regular Positions in the Last 12 Months Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 201413 Note: Respondents who answered "don't know" were excluded from this analysis. Percentages may not equal 100% due to rounding.

14. Hired U.S. Veterans for Full-Time Regular Positions in the Last 12 Months Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 201414 Note: Only statistically significant differences are shown. California responses were excluded from the United States group for this analysis. United States—California Comparison Organizations in California were less likely to have hired U.S. veterans for full- time positions in the last 12 months compared with the rest of the U.S. Hired U.S. Veterans California (50%)>United States (65%)

15. Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 201415 Demographics (California)

16. Demographics (CA): Organization Industry Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 201416 Note: n = 572. Percentages do not equal 100% due to multiple response options. Percentage Professional, scientific, and technical services16% Accommodation and food services, retail/wholesale trade11% Health care and social assistance11% Manufacturing11% High-tech10% Other industry9% Government agencies9% Finance, insurance, real estate and rental and leasing8% Educational services7% Construction, mining, quarrying, and oil and gas extraction6%

17. Demographics (CA): Organization Sector Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 201417 Note: n = 572. Percentages do not equal 100% due to rounding.

18. Demographics (CA): Organization Staff Size Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 201418 n = 504

19. n = 535 Demographics (CA): Other Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 201419 U.S.-based operations only 67% Multinational operations 33% Single-unit organization: An organization in which the location and the organization are one and the same. 30% Multi-unit organization: An organization that has more than one location. 70% Multi-unit headquarters determines HR policies and practices 48% Each work location determines HR policies and practices 3% A combination of both the work location and the multi-unit headquarters determines HR policies and practices 49% Is your organization a single-unit organization or a multi-unit organization? For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or by both? Does your organization have U.S.-based operations (business units) only, or does it operate multinationally? n = 542 n = 398

20. 20 SHRM Survey Findings 3,655 HR professionals participated in this survey from a randomly selected sample of SHRM’s membership from the entire United States and an additional random sample from California U.S. respondents (including CA) = 3,335, response rate = 13%, margin of error = +/-2% CA respondents = 572, response rate = 10%, margin of error = +/-4% Survey fielded December 16, 2013 - January 16, 2014 Survey Methodology Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 2014

21. SHRM California Resources  http://www.shrm.org/hrdisciplines/pages/california.aspx http://www.shrm.org/hrdisciplines/pages/california.aspx SHRM Leading Indicators of National Employment (LINE)  http://www.shrm.org/research/monthlyemploymentindices/line/pages/def ault.aspx http://www.shrm.org/research/monthlyemploymentindices/line/pages/def ault.aspx SHRM Jobs Outlook Survey (JOS)  http://www.shrm.org/research/monthlyemploymentindices/lmo/pages/defa ult.aspx http://www.shrm.org/research/monthlyemploymentindices/lmo/pages/defa ult.aspx SHRM Metro Economic Outlooks  http://www.shrm.org/research/monthlyemploymentindices/pages/metroeco nomicoutlooks.aspx http://www.shrm.org/research/monthlyemploymentindices/pages/metroeco nomicoutlooks.aspx SHRM’s Workforce Readiness Resource Page  http://www.shrm.org/hrdisciplines/staffingmanagement/articles/pages/ workforcereadiness.aspx http://www.shrm.org/hrdisciplines/staffingmanagement/articles/pages/ workforcereadiness.aspx SHRM Foundation: What’s Next: Future Global Trends Affecting Your Organization, Evolution of Work and the Worker  http://www.shrm.org/about/foundation/shapingthefuture/documents/2- 14%20theme%201%20paper-final%20for%20web.pdf http://www.shrm.org/about/foundation/shapingthefuture/documents/2- 14%20theme%201%20paper-final%20for%20web.pdf Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 201421 Additional SHRM Resources

22. For more survey/poll findings, visit shrm.org/surveysshrm.org/surveys For more information about SHRM’s Customized Research Services, visit shrm.org/customizedresearchshrm.org/customizedresearch Follow us on Twitter @SHRM_Research@SHRM_Research Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 201422 About SHRM Research Project lead: Tanya Mulvey, researcher, SHRM Research Project contributors: Alexander Alonso, Ph.D., SPHR, vice president, SHRM Research Evren Esen, director, Survey Programs, SHRM Research Yan Dong, Survey Research Center, SHRM Research Christina Lee, researcher, SHRM Research Qikun Niu, intern, SHRM Research Jennifer Schramm, manager, Workplace Trends and Forecasting, SHRM Research Joseph Coombs, senior analyst, Workforce Trends, SHRM Research Copy editor: Katya Scanlan, SHRM Knowledge Center

23. Founded in 1948, the Society for Human Resource Management (SHRM) is the world’s largest HR membership organization devoted to human resource management. Representing more than 275,000 members in over 160 countries, the Society is the leading provider of resources to serve the needs of HR professionals and advance the professional practice of human resource management. SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China, India and United Arab Emirates. Visit us at shrm.org.shrm.org Economic Conditions—California Global Competition and Hiring Strategies ©SHRM 201423 About SHRM