For years, the biggest concern among mid-size and large Massachusetts employers seemed to be that the high cost of housing here was chasing away current and prospective workers.
That concern hasn’t gone away. But the latest annual survey of the Massachusetts Business Roundtable membership shows another worry has taken its place at the top of employers’ concerns: economic and geopolitical uncertainty.
“With all the focus we give on cost of living in Massachusetts, … that’s not what is top of mind for our members 1785353322,” said JD Chesloff, the Roundtable’s chief executive. “It just shows you how much this federal stuff is on people’s minds.”
The survey, taken by McKinsey & Co. of a majority of the Roundtable’s nearly 100 members, shows employers believe inflation, macroeconomic pressures, and changes in federal policies will have the biggest impact on their organizations this year. Nearly everyone expects these factors to negatively affect the state’s economy in 2026.
The concerns around affordability, though, haven’t gone away, particularly with regard to housing. Eighty percent of respondents said reducing the cost of housing would have the greatest impact on the state’s competitiveness, out of nine options. As a result, more than two-thirds say they are adjusting their salaries upwards as their primary talent retention strategy.
Only 13 percent of employers say they plan to expand their workforce in Massachusetts this year, similar to last year, while a quarter of them expect to add people outside of the state. More than half expect no change to their footprint here, and almost no one expects to reduce it. Most of the growth overall is being seen in entry-level jobs — a third expect to add those kinds of positions — with fewer new jobs seen in mid-career or executive level positions.
Chesloff said local employers became increasingly comfortable adding jobs outside of the state during the COVID-19 pandemic, when remote work was widely accepted. Now that most people are consistently back in the office — most Roundtable members have largely settled on a hybrid model, with several requiring fully in-person work — the trend toward adding more people outside of Massachusetts doesn’t seem to be abating.
“Companies that have the option to hire … outside of the state are more comfortable with that post-COVID,” Chesloff said. “If you’re going to keep people here, it costs more.”
Jon Chesto can be reached at jon.chesto@globe.com. Follow him @jonchesto.
