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Wednesday, September 20, 2017

How Do Employer Attitudes Impact Association Engagement?

Association Laboratory's research has consistently shown that employer circumstances impact association engagement for trade and professional societies.

Key forces impacting employer circumstances include the following:

  • Increased ROI consciousness of businesses, employees, and customers
  • Company mergers and acquisitions
  • Changes in government behavior

ROI Consciousness

Organizations and the individuals they employ are more conscious of the specific return on investment (ROI) of their membership dues, association product purchases, or personal commitment of time - these circumstances impact engagement.

The recent economic downturn has created a climate wherein employers minimize expenditures not essential to the company's product or service, or a person's direct professional goals or responsibilities.

Economic uncertainty fuels employer caution in several areas:

  • Cautious about investment
  • Cautious about hiring
  • Cautious about customers

The following chart from a recent study highlights the importance of relevance to organizational and personal goals related to content.

Chart

Organizations and individuals are not necessarily value conscious or price sensitive. They are willing to pay but only for products, services, or initiatives they deem relevant ore essential.

Change in Employer Structure

The second important factor identified in the research was changes in employer structure.

In Association Laboratory's environmental scanning study Looking Forward 2014 23% of professional and 41% of trade association executives believed mergers, acquisitions, or consolidations would impact their association.

Consolidation creates smaller numbers of larger organizations.

This reduces the number of companies and individuals to be engaged. For example, in the Building Managers and Owners Association, historically, each building had a manager who was targeted for membership. Now, if five buildings are managed by a single entity there is only one person to engage, and this person now controls a larger organization with a substantially larger budget.

Changes in Government Behavior

Restrictive Government Funding

National governments are large customers in the economy. From teacher salaries to healthcare outlays and infrastructure investment, national governments are a substantive source of economic activity. As a larger portion of government expenditures become devoted to existing entitlements and debt payments, fewer funds are naturally available for investment in other initiatives.

Many local, state/provincial, and national governments continue to face challenging economic situations. The negative environment for substantive increases in income tax revenue, particularly within the United States and the EU Zone, may make it difficult to substantively increase government revenue through tax increases.

Government Focus on Revenue

Governments will initiate more aggressive efforts to collect revenue.

As noted earlier, local, state/provincial, and national governments, particularly in the United States and Europe, face substantive revenue and debt challenges. This creates incentives for these governments to implement policy changes designed to increase tax and fee revenue.

While the public is resistant to increased taxes, governments have been willing to increase taxes, particularly on the middle and upper classes, as evidenced by the reinstatement of the full Social Security tax on the middle class in the United States. The necessity of financing increasing entitlement costs and paying large public debt in the United States and the EU Zone will increase the focus of government on expanding revenue sources and collection.

The result will be renewed focus on user fees and eliminating traditional tax breaks (for example for nonprofit activity) to generate additional revenue.

Increased Regulatory and Compliance Costs

In Looking Forward 2014, 41% of respondents stated their members were concerned about increased regulatory and compliance costs.

Organizations will face increased costs because of new regulatory and compliance requirements and more aggressive efforts by state/provincial and national governments to regulate industries and professions in order to collect more revenue.

Companies that have to increase expenditures in regulatory and compliance activities may represent an opportunity for education or other services for associations but this investment may also reduce the funds available to support other forms of engagement.

In summary, Associations need to monitor how employing organizations are changing and how the government relationship with employing organizations shape their decisions because these have substantial impact on the ability of people within these organizations to engage with the association.

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