What Will It Take to Trump the Competitive Job Market in 2017?
For employers seeking talent and job seekers trying to find a new gig, the labor market is never far from top of mind. This is especially true around the typical four- or eight-year cycles of U.S. presidential administration transition. We await, either with nerves or confidence (more likely nerves), what’s likely to happen with the markets and the state of hiring as the year gets into full swing.
As January 20 is fast approaching, in this post, we’ll take a look at recent trends in employment rates for context on what we can expect at the beginning of the Trump Administration, and how recruiters and talent acquirers can have a successful 2017 when viewing a labor market and technological advances that are combining to tilt the balance of power toward job seekers.
75 Consecutive Months of Job Growth Tightens the Labor Market
According to the Bureau of Labor Statistics December 2016 unemployment report, the U.S. unemployment rate showed little change from previous months at 4.7%, adding 156,000 jobs to the economy, the 75th consecutive month of job growth. During this record streak of monthly job growth, the U.S. has added nearly 15 million jobs overall.
Nate Silver’s FiveThirtyEight paints the broad picture with this chart:
While 2016’s overall job growth (2.2 million) was down from 2014’s 3 million and 2015’s 2.7 million, this drop off partly reflects the nature of a maturing recovery and—more importantly—the number of people looking for jobs today is far fewer than in the past few years. And while December’s 156,000 gain is lower than expected, November’s tally was a full 26,000 above the month’s estimate.
When compared to the employment situation when the Obama Administration took office in January 2009, this is a much rosier picture for the upcoming administration. In the depths of a recession with failing financial institutions and government intervention, employers slashed 791,000 jobs in the first month of 2009, which had an official unemployment rate of 7.6%. According to the Washington Post, the 4.7% rate is just about at what the Federal Reserve considers full employment when accounting for ever-present structural reorganization.
In a tighter labor market, employers are in greater competition for highly qualified talent, which they’ve been aware of over the course of this record stint of job growth. But there’s also another important but less-talked-about statistic that’s tilting the playing field more toward job hunters and demanding that prospective employers bring their best game.
Eight-Year High in Nominal Wage Growth Increases Employee Bargaining Power
While some debate how “real” the recovery has been in terms of the recovery on Main Street, the December 2016 BLS report contained another important statistic: the 2.9% nominal wage growth (year over year) for 2016—this is the fastest pace of growth since mid-2009, and a signal that workers have gained more bargaining power in a tight job market. With a low enough level of unemployment, employers are forced to raise wages to acquire and keep needed workers who have more employment options than before, further complicating the ability to acquire and retain the top talent.
Industry has of course encountered these labor market forces before and allocated additional resources and efforts toward the more difficult hiring process, but there’s an additional wrinkle this time around: candidate experience is vastly different due to technology advancements that favor the candidate. If you haven’t already taken steps to optimize your candidate experience, rest assured that your top competitors have, and their leg up and 2017’s outlook may combine to leave you stuck in last year.
Catering to the Candidate Driven Job Market
As we’ve written about in other articles, the savvy job candidate has infinitely more tools and expectations today than the days of uncapping the red marker and hovering over the classified section in the newspaper or want-ad, and even substantially more than just the recent digital days of Monster or CareerBuilder searches and resume postings.
The Internet is an endless bounty of information, and job prospectors make heavy use of it. For example, according to a CareerBuilder study, the average candidate uses 16 resources when searching for a new job, and 44% subscribe to job alerts (according to Indeed).
And it’s not just the candidates that have noticed. According to the MRINetwork Recruiter & Employer Sentiment Study, 86% of recruiters identified the labor market as “candidate-driven” compared to just 56% that said the same thing in 2012. Additionally, 62% of employers responding to this study felt that talent, rather than employer activity, is what’s really driving the job market today. In much the same way that B2B marketing has shifted from an outbound focus toward an inbound one, forward thinking recruiters and talent hawks have understood the need to enhance and cater to the ideal candidate experience or “journey.”
So what are you doing to get your brand in front of coveted eyes? It’s more important than ever before to take a proactive approach to ensuring that you’re finding and engaging talent and following through with a positive candidate experience, regardless of the outcome.
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