What Recruiters Need to Know about the Current Surge in Job Openings
Job openings in US have reached record highs, even beating pre-recession levels. That means as of July 2015, there were 5.75 million jobs waiting to be filled. Looking back over recent months, the picture is even rosier. The number of job openings has steadily increased, at a three-month annualized rate of 35%, and economists expect that rate to accelerate.
However, there were 4.98 million hires in July, a slight decrease compared to June. This left the hires rate at 3.5%, down from 3.7%, and with little change across regions compared to earlier this year. While there were some increases among accommodation and food services, and in federal government, notable decreases in hiring came from construction, and arts, entertainment, and recreation.
The jump in job openings, coupled with the slow rate of hiring in the US, suggests businesses are having a more difficult time sourcing quality hires. Employers can no longer count on the recession and a tight labor market to give them an edge, and have mounting concerns about a skills gap among available workers. This post will examine the state of the US labor market, and discuss how employers can make current conditions work for them.
Gaps in the Growing Labor Market
The disparity between the number of job openings and the number of hires is not a new concern. Last year PriceWaterhouseCoopers conducted a survey of global CEOs, and 63% said simply finding workers with the right skills was a threat to the growth of their business. Job openings were greater than hires in 2014, and with the economy continuing to improve, it’s no surprise that this gap remains.
Businesses are rebounding from the Great Recession, and as a result are prepared to hire more workers. But many of those jobs are going unfilled as employers struggle to connect with qualified candidates. Before the recession, unskilled workers without a college degree would still find work in areas like construction.
Now that we’re emerging from the recession, those unskilled jobs have not bounced back, and instead employers are looking to hire for more skilled, technical positions (or temporary and low-wage positions). Professional and business services, accommodation and food services, retail trade, and nondurable goods manufacturing all reported an increase in open positions.
While retail and food service jobs don’t require higher education and extensive skills training, they’re not the well-paid, highly sought jobs many candidates would prefer. The real skills gap comes amid IT and manufacturing jobs, where technical expertise and specialized equipment require more training than many candidates have.
Why Is it Still Hard to Fill Positions?
A lack of technical skills among applicants is perhaps the biggest impediment to hiring in the US today. But difficulty filling job openings can also be traced to changes in demographics. The Millennial generation has become the largest component of the US labor market, and their goals and expectations as employees differ wildly from their older colleagues.
Millennials emphasize employee well being and development over personal income, and prefer to work for businesses that improve society in some way. Overall, the quits rate among US employees–those willing to leave their job–has been increasing slightly since the end of the recession, and currently stands at 1.9%. But younger workers have always much more likely to change jobs more frequently
As job openings increase and workers, particularly young workers, have more options for employment, retention rates may continue to suffer. This is where a robust candidate experience, and an engaging employer brand, become so crucial to a company’s talent acquisition strategy.
Be the Company People Want to Work for
Let’s ignore the latest job market data for a minute. Employers should always be focused on hiring the best people for the jobs they have available. So labor market trends shouldn’t be their primary concern. Instead, they should be working to continuously improve their recruitment techniques, delivering a consumer-quality candidate experience.
Take Chipotle, for example. Before announcing their intention to hire 4,000 people in one day, the company had already built a well-recognized employer brand. Sustainably-sourced menu options and improved benefits for part-time employees, combined with a next-generation mobile apply experience. Comparing the two weeks prior to the August 24 announcement, to the two weeks after, Chipotle’s number of applicants increased by 65%.
A strong employer brand, with smart usage of social media and a robust candidate experience that includes mobile channels, helped Chipotle source the workers they needed. When combined with meaningful data and informative tools, any employer can achieve the same results. The goal should be to make people want to work for you, regardless of current labor market conditions.
Candidates are consumers, and providing them with a consumer-quality experience will go a long way when few others are. Read our new eBook, “The Talent Acquisition Leader’s Guide to the New Candidate Journey” to learn more about this topic and what to do about it.