Business in the Northwest 2022

Executive Summary

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Since 2018, WSU’s Carson College of Business has surveyed business leaders and employees across the Pacific Northwest (PNW) to gain a deeper understanding of the perceived trajectory of the business climate and how the region’s business community is faring. Last year, with ongoing challenges caused by COVID-19, businesses faced closures, uncertainty and heightened anxiety. This year, despite new and unexpected headwinds, our report found business leaders and employees are increasingly resilient, choosing to innovate and adapt to new ways of working to come out of the pandemic stronger than ever.

The Carson College of Business’ fifth annual Business in the Northwest report—based on a survey of 950 respondents in the Pacific Northwest (Washington, Oregon, and Idaho) including business leaders, employees and Gen Z employees—provides a deeper look at how business leaders and employees’ priorities and perceptions have changed as the COVID-19 pandemic continues. Through our research, we discovered the following key insights:

1. NEW CHALLENGES: While areas such as sales volume, revenue and profitability appear to be rebounding from the impacts of COVID, business leaders are now struggling with production and labor shortages.
2. EMPLOYEE EXPERIENCE: Now, more than ever, most PNW employees feel it is crucial to work for a company that cares about employee wellbeing and has values that align with their own.
3. RETURN TO OFFICE: Safety concerns are no longer the reason why many favor remote work. Employees and employers alike prefer the flexibility, but admit it has made collaboration and communication more difficult.
4. GEN-Z OUTLOOK: While Gen Z employees are most likely to feel COVID hindered their growth, they remain optimistic about the future.

In the wake of the Great Resignation and the ever-evolving debate over return to office, enhancing the employee experience has become an important focus for companies to avoid losing talent. Despite the ongoing challenges the pandemic has created, especially for Gen Z employees, optimism about the future of the business climate in the PNW remains.

METHODOLOGY

This survey was commissioned by WSU’s Carson College of Business and conducted by Edelman Data & Intelligence, a full-service consumer research firm. Fielded between 11/24/2021-12/20/2021, the online questionnaire surveyed 1,050 respondents in the Pacific Northwest (Washington, Oregon, and Idaho) including N=300 PNW Business leaders N=500 PNW Employees, and N=150 PNW Gen Z Employees with an additional oversample of respondents from Eastern Washington.

This survey is the fifth wave of this survey, with previous waves released in 2018, 2019, 2020, and 2021 (including a special COVID-19 wave conducted in June 2020).

For expanded findings, we have included an interactive, data visualization dashboard that can be broken out by age, gender, state and region. If you still can’t find what you’re looking for, please reach out to Eric Hollenbeck, communications manager for research, as additional data is readily available.

As we approach the end of our second year in a pandemic, PNW business leaders are experiencing positive changes and new challenges.

Last year, business leaders reported a decline in performance related to sales volume (58%), revenue (57%), and profitability (56%). This year, we see those areas improving, but business leaders are now struggling with production and labor shortages.

Employees, too, are concerned about the labor shortage and the challenges around hiring and retaining employees. 30% say the inability to fill open positions is one of the top barriers to their companies’ success in the next year, followed by employee attrition (29%).

Meanwhile, 69% of PNW business leaders say they want to create more job opportunities at their company but are not confident there are enough qualified applicants to fill them.

Additionally, business leaders are struggling with supply chain shortages (66% say it may impact their companies’ ability to meet its goals) and vaccine mandates (28% say it’s a barrier to success) as well as the continued impacts of COVID.

While employees are also still strongly feeling the impacts of COVID, 63% say job opportunities in the PNW region are on the rise, and despite new and continued challenges, confidence in the resilience of PNW businesses remains.

Prior to COVID-19, fewer business leaders and employees valued an appropriate work-life balance. In the past two years, this sentiment has risen significantly, with 95% of both business leaders and employees and 89% of Gen Z agreeing this is of importance to them. While there may be different reasons for this change, one thing is clear: COVID-19 has forced companies to evaluate the needs and wants of its employees, or risk losing the war for talent.

To remain nimble to the evolving challenges brought on by COVID-19, business leaders implemented more flexible working environments and created opportunities for training and reskilling. These changes bode well for companies, with PNW employees saying work from home/teleworking (75%) and opportunities for hybrid (74%) had a positive impact on their morale. For Gen Z, additional training (74%) was at the top of the list.

Additionally, most employees across demographics agree diversity, equity, and inclusion (DEI) initiatives and mental health offerings are a “must have,” and many only want to work for a company whose values align with their own. There was a 13% increase in this sentiment amongst Gen Z employees over the last year, highlighting the increasing desire for values-based leadership.

In the wake of the Great Resignation, companies that are unable to provide flexibility, remote work and clear mental health offerings risk seeing increased employee exodus.

The value of remote work has been a hotly debated topic throughout the pandemic with some eager to return to the office and be face-to-face with coworkers while others prefer to remain in the convenience of their own homes.

Though it can provide more flexibility and positively impact productivity, most business leaders and employees reported it made collaboration and communication more difficult, with 38% of PNW employees reporting remote work as having the most negative impact on collaboration and teamwork.

The hesitation to return to office is not due to health and safety concerns—3 in 4 feel it’s perfectly safe to work onsite right now —but rather they value the balance and wellbeing that remote work has provided.

While the attitude toward return to office has shifted in regard to safety, over a third of employees hope their companies continue offering flexible work such as virtual meetings (38%), hybrid work options (38%), and flexible work hours (36%).

Many new Gen Z workers are worried starting their careers remotely during the COVID-19 pandemic has hindered their growth, leading more than half to feel less passionate about their chosen industry of work (60%) and even more rethinking the plans they had for their future careers (77%).

Despite feeling that they are ‘behind’ some of their coworkers and peers due to having missed the in-person experience (67%), Gen Z employees still prefer the new ways of working brought on by COVID-19 and feel the strongest that the business climate is changing in a good way (71%).

Gen Z employees feel much less worried (49%) about the growth potential of their career than they did last year (68%). They also feel better about what the future holds for their companies than they did in 2021—only 55% say they are not sure what the future holds compared to 70% last year.

Overall, PNW Gen Z employees are showing a positive and hopeful outlook on the future of their career and the business climate. Many feel they have what they need in their position to add to the success of their company (80%) and are confident their company will meet its growth goals for the next year (80%).

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