2018 TRENDS REPORT Planning for Growth in an Evolving Business Climate

WHO WHAT PAYNEWEST SURVEY METHODOLOGY Summer of 2018 Sent to hundreds of clients WHAT 16 Question Survey Summer of 2018 We received 121 responses • business owners C-level executives risk managers human resources and administrative professionals BUSINESS CLIMATE RISK MANAGEMENT WORKFORCE & LABOR 2018 TRENDS REPORT

INDUSTRIES REPRESENTED DIVERSITY OF INDUSTRIES REPRESENTED Construction (29%) Distribution and Trucking (15%) Agribusiness (14%) Retail (12%) Non-profit (11%) Manufacturing (7%) Professional Services (7%) Healthcare (4%) 4% 7% 29% 11% 12% 15% 14% 2018 TRENDS REPORT

REVENUE DISTRIBUTION WHAT IS YOUR ANNUAL COMPANY REVENUE? 2018 9% 17% Under $5 Million 7% $5 - $10 Million $10 - $20 Million 21% $20 - $50 Million 24% $50 - $100 Million $100 Million+ 22% 2018 TRENDS REPORT

EMPLOYEE DISTRIBUTION HOW MANY EMPLOYEES ? 2018 TRENDS REPORT Under 10 1% 6% 4% Under 10 11% 10 - 50 33% 50 -100 100 -200 20% 200 - 500 500 - 1,000 25% 1,000 + 2018 TRENDS REPORT

BUSINESS CLIMATE Looking ahead–where do you see your business in the next 5-10 years? 2018 TRENDS REPORT

INDUSTRY TRENDS – NEW MARKET EXPANSION Construction 31% Agribusiness 35% 2018 TRENDS REPORT

RISK MANAGEMENT What are the primary risks facing your business today? Lack of qualified new hire candidates (27%) Regulatory (18%) Safe Workplace (17%) Future leadership (9%) 3% 4% 27% Cyber security (4%) Supply chain disruption (4%) Loss of key clients (4%) Technology (4%) Reputation damage (4%) Product concerns (3%) Natural catastrophes (3%) Distracted driving (1%) 9% 18% 17% 2018 TRENDS REPORT

54% 29% WORKFORCE AND LABOR How do you feel about your retain quality employees? ability to attract and 54% Find it challenging to 29% Find it challenging to attract and keep fill specific positions. good employees. 2018 TRENDS REPORT

LABOR SHORTAGE Vocational training is back in the U.S., as companies scour high schools for historically rate. workers amid a low unemployment 2018 TRENDS REPORT

WORKFORCE SOLUTIONS Trade education programs Depth chart planning • Trade education programs • Depth chart planning • Automated processes 2018 TRENDS REPORT

RISK MANAGEMENT Safety culture Liability/business continuity Cybersecurity 2018 TRENDS REPORT

SAFETY CULTURE Written Safety Plan Employee Safety Training 90% 78% Employee Safety Training Early return-to-work program 61% Use of outside professionals to manage safety 42% 19% Employee Incentive for reduced injuries Management Incentives for reduced injuries 13% 2018 TRENDS REPORT

SUCCESSION PLAN 58% do not have a formal, documented succession or exit plan. No (58%) 5% Yes (37%) 37% 58% I haven't thought about transitioning my company (5%) 2018 TRENDS REPORT

CYBERSECURITY 2018 TRENDS REPORT

CYBERSECURITY 2018 TRENDS REPORT

RISK SOLUTIONS Cybersecurity assessment Adequate liability coverage • 2018 TRENDS REPORT

NATIONAL TRENDS 87% of employers say improving employee retention is a critical priority 56% are concerned about affordability of employee health insurance 52% have trouble filling open positions with qualified workers, especially retirements of skilled employees 2018 TRENDS REPORT

SOLUTIONS Work Comp and Health Insurance results are tied together Direct and Indirect Costs Culture - Safe Workplace - Return to Work - Wellness Programs - Employee Engagement / Education 2018 TRENDS REPORT

THE FUTURE Emerging Risk Cyber Alternative delivery systems Driverless autos Culture shift with millennials in workforce Substance abuse Attracting and retaining talent Legal liability Broad economic uncertainty 2018 TRENDS REPORT