The Labor Pool Is Shrinking
We should be celebrating. For the past year, according to the Department of Numbers, the unemployment rate has hovered right around 5%. In September 2015, it was 5.1%, and in August 2016, it was 4.9%. (For Californians, the figures ranged slightly higher, from 6.0% in September 2015 to 5.5% in August of this year.) And, says the Central Valley Business Times (CVBT), in many metropolitan areas the jobless rate is even lower, with 110 metropolitan areas having an unemployment rate under 4%. That’s great, right?
Yes, but as the economy improves, it also means that the labor pool is shrinking. Employers who are trying to hire have fewer new workers to choose from, because most of the best are already employed. As employers more aggressively seek to hire professionals who are already employed, CVBT notes that a trend is emerging.
The Empowerment of the Underemployed
For a long time, a hidden facet of the unemployment statistic is those who are underemployed–those millions of Americans who are stuck working only part-time jobs or are over-qualified for their current jobs. As the underemployed see that the labor pool is shrinking and employers are looking to employed candidates to fill their open jobs, the underemployed feel empowered to look for better jobs. In fact, according to CareerBuilder, 75% of all employees are actively seeking new jobs!
The Challenge of Employee Retention and Hiring
For you as an employer, this entire scenario means that hiring qualified workers is going to get even more difficult, and retaining your best employees will become even more challenging. Chances are that some of your workers fall into the 55% of employees who don’t feel valued, and the 63% who don’t believe they’re paid fairly. And when you make an offer to a candidate, you may be one of the 25% whose offer gets rejected. It’s a challenging market but, for the strategically minded, not without hope.
A Plan to Keep and Hire the Best
If you haven’t already done so, now would be a good time to review your plans for giving bonuses and pay raises. Giving these will communicate to your employees that you value and want to keep them. For your open positions, consider running compensation reports so that your next hire is neither underpaid nor overpaid. For more tips on retaining employees and hiring candidates in this market, see our post outlining how high-performing companies are doing it well.
While it’s good news that the economy is improving, with that stabilization comes the inevitable truth that the labor pool is shrinking. New strategies are needed for your organization to succeed. How will you approach your next staffing challenge?
If you need assistance hiring the best people, we can help to actively market your job opportunities, connect you to passive job seekers, and lend a hand with negotiating offers to top candidates. Click here or call (714) 993-1900 to start your Amtec search.