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According to a June New York Times article, “We may be closer to full employment than it seemed.” The source asserted the possibility that this is as good as it will get for the United States labor market. Why? Slowed job growth with 184,000 new positions as the average monthly gain compared to 186,000 in 2016, and an all-time low of 4.3 percent for the unemployment rate – not because of more people finding work – but because of modest wage increases and a labor force that has been shrinking for the last few years.
This dynamic is particularly apparent in the professional job market where many companies are focused on expanding, but are finding it difficult to locate enough skilled talent. In this sector, which has been candidate-driven for several years, the lack of skilled talent is further complicated by top candidates who feel free to reject job offers or accept contract assignments from other companies. So as a hiring authority, what can you do to improve your odds of bringing in high performers to your blended workforce?
The 2017 Recruiter Sentiment Study conducted by CDI subsidiary, MRINetwork, reveals that the inability to find quality talent coincides with lengthy hiring practices, lower than expected compensation, and an employer sentiment that candidates should be honored to be considered for their job opportunities. Retention is also challenging, as high performers recognize that more jobs are available and feel more confident about pursuing them.
Based on the Study findings, the following are the top hiring insights for employers to know:
Insight #1: It really is a candidate-driven market.
MRINetwork recruiters have been observing the shift to a candidate-driven market over the last five years and the according to the survey, 90 percent of recruiters still feel the professional labor market is candidate-driven in most industry sectors. By contrast, 47 percent of employers believe companies have the upper hand. The reality is the best candidates have other job options, so your value proposition must clearly articulate how coming on board as either permanent or contract employees would benefit their careers. Assuming that candidates should feel lucky to be invited for an interview with your company is one of the biggest mistakes that can be made when trying to attract top talent.
Insight #2: Compensation has become the top deciding factor for high performers who are looking to make a job move.
Recruiters, employers and candidates agree that advancement opportunities and better compensation packages are the most important factors to candidates looking for a job. Over 50 percent of candidates selected competitive compensation packages most often, followed by advancement opportunities, suggesting that compensation is the deciding factor when considering a new job. Across all respondents, compensation was also one of the primary reasons an offer or a contract assignment was rejected, along with the candidate accepting another offer. Ultimately, compensation needs to be competitive enough to convince high performers to leave their current situation.
Insight #3: Rejected job offers matter in a talent short economy.
Almost half of surveyed employers said offer rejection percentages were between 1 – 10 percent. While this may seem like a small amount, every bit of lost talent matters when there is a shortage of qualified candidates to fill permanent or contract jobs in many industries. Compensation is not the only reason for offer rejections; frequently it is the interview process itself. It’s critical to provide a streamlined and positive interview process that keeps applicants informed of where they stand every step of the way. Most importantly, everyone on the interviewing team should be providing consistent messaging about the role, and clearly articulating why your company culture and values make it an enviable place to work.
Insight #4: Workplace expectations have changed.
Today’s top performers want more out of life than the standard 9-5, in-office work scenario. Fifty-five percent of surveyed candidates said work-from-home options are somewhat to extremely important to them. Additionally, an “emphasis on work-life balance” was the second most selected attribute by candidates who are considering a job move this year. While the tendency may be to think that candidates want to work less, or that working from home will decrease productivity, top talent want to work more efficiently, any time, and from anywhere. Providing this flexibility is not only attractive to prospective hires, but also creates the potential for happier, engaged employees who feel their work life does not overshadow personal interests and obligations.
Insight #5: Most companies aren’t prepared for upcoming surge in Baby Boomers retirements.
When asked to describe the upcoming onset of large-scale Baby Boomer retirements, employers and recruiters agreed that most businesses are not prepared for the workforce changes involved with preparing for baby boomer departures. Employers also feel that programs will need to be developed to retain Baby Boomers, either on a full-time or contract basis, to alleviate some of this pressure. Organizations that are able to prioritize succession planning and career-pathing now by making it part of their company culture will be better able to respond to baby boomer retirements.
When you consider these 5 hiring insights, it’s clear how they may be impacting your ability to attract top talent in a candidate market that is making it increasingly difficult to bring both permanent and contract workers on board. The hiring landscape and candidate expectations have changed. Companies that want to attract and retain the best talent, will need to revisit their interviewing and talent management approaches, to position themselves as a great place to work.
To view the complete Study and a short video recap of these hiring insights that can be easily distributed to others in your organization responsible for hiring, visit CDICorp.com/staffing/client-resources.
Recent CDI Analysis
“Compensation has become the top deciding factor for high performers who are looking to make a job move.”MRINetwork, subsidiary of CDI Corporation
Employment Situation (U.S.)
The July Employment Situation Report from the Bureau of Labor Statistics revealed a 0.1 percent decline in the U.S. unemployment rate – to 4.3 percent – and a gain of 209,000 jobs in total nonfarm payroll employment, above economists’ projections for 183,000 jobs.
Some industries that saw an uptick in June, such as healthcare, experienced further improvement, while other sectors, such as professional and financial services, showed new increases that hadn’t been seen the previous month. Also, the number of Americans classifiable as "long-term unemployed" remained static at around 1.8 million as it totaled the previous month, but that trend has seen gradual reduction for most of the year, per previous data releases by the BLS.
Professional and business services saw large job gains of 49,000. Employment within the healthcare sector increased by 39,000, slightly more than in June, and notably outpacing the 2017 average of 24,000 new jobs in the field per month.
Mining, meanwhile, saw minor growth of only 1,000 jobs added, and several sectors, including construction, manufacturing, information, transportation, retail, financial services and government, saw no notable movement in either direction.
As noted in The New York Times, many economists consider a one-two punch of strong wage growth and a high rate of labor participation to be among the most reliable indicators of a strong economy. The participation rate earned significant attention in 2016 due to its decline, hitting lows not seen in the past several decades and fueling perception of economic downturn in spite of a fairly low unemployment rate – around 4.7 percent for much of last year. Any significant increase in this metric would thus engender increased confidence in the overall economy. The labor participation rate remained steadfast at 62.9 percent for the month – where it has remained for the greater part of 2017.
Average hourly earnings for all nonfarm employees rose 0.3 percent in July, slightly above the 0.2 percent wage growth experienced in June. Although not as high as many financial leaders might like, news of this growth and the generally strong jobs report caused increases in both stock futures and Treasury yields, according to CNBC.
Probability of an increase in Federal Reserve interest rates also strengthened, rising to 45 percent from the 41 percent noted as recently as Aug. 3, 2017. Overall, while the figures in the July BLS labor report did not show uniform improvements, its findings nonetheless constitute fairly positive news.
The full Bureau of Labor Statistics report can be downloaded by
Employment Situation (Canada)
Canada added a net 10,900 jobs in July, following a gain of 45,300 positions in June, according to data released by Statistics Canada. Though job growth was slower in July, the gains marked the eighth consecutive month of expansion in the labour market.
The unemployment rate fell 0.2 percentage points in July to settle at 6.3 per cent, which is the lowest rate since October 2008. The labour force participation rate remained relatively unchanged in July.
Over the year, the country has added 388,000 new jobs. Some 354,000 of those jobs were full-time positions, CTV News noted.
"After a run of huge gains, nobody is going to complain about the more moderate hiring pace that Canada saw in July, and the attention instead will focus on yet another drop in the jobless rate," said Avery Shenfeld, chief economist of CIBC Capital Markets, in a note to clients, according to the news source.
Industry-wise, wholesale and retail trade added the most jobs in July, gaining 22,000 workers, an increase of .08 percentage points from June. The industry has added 94,000 jobs on a year-over-year basis.
Information, culture and recreation jobs increased by 18,000 in July, while manufacturing added 14,000 positions.
Educational services registered the largest decline in employment in July, shedding 32,000 jobs. Public administration also lost 10,000 positions, while agriculture employment decreased by 10,000.
There was little change in public and private sector employment. However, over the year the number of public sector jobs has increased by 3.8 per cent, and the number of private sector positions has grown by 1.9 per cent.
Last month, the Bank of Canada raised the interest rate for the first time in nearly seven years, increasing it to 0.75 per cent, Global News reported. Economists anticipate that the bank will hold off on further hikes until October.
Canadian ES Report:
Labour Force Survey, July 2017