The U.S. economy has come a long way in recent years, and we’re now starting to experience some trends reminiscent of periods of full employment. What this means for employers is more pressure in two core areas of human resource management, namely hiring and retaining employees.
Since the severe economic decline of the 2008 recession, we’ve seen an extended period of growth. Unemployment rates remained stubbornly high at first, and people began calling this a "jobless recovery." From an HR perspective, it seemed pretty clear that employers were in no hurry to add back the people and payroll costs they shed during the downturn.
We’re now several years into the recovery, and the numbers are starting to tell a different story. The official unemployment rate has gone from 10 percent in October 2009 to less than 5 percent currently, as calculated by the Labor Department’s Bureau of Labor Statistics.
At the same time, the number of potential workers who want a job but stopped looking has been on the rise, and so has the number of potential workers who dropped out of the labor force. Because the BLS figures don’t include these "missing workers," many would argue that full employment remains a long way off.
I’ll leave that debate to the economists and statisticians. What really matters from the HR perspective is whether the job market is heating up to the point where employers are scrambling to find and keep good employees.
Here’s the good news: We’re not experiencing talent wars like those that occurred during the dot-com bubble at the end of the last century. Still, there’s anecdotal evidence suggesting that recruitment, retention and employee engagement are eating up an increasing amount of time and attention.
We also have hard data from our own quarterly surveys at Bloomberg BNA indicating that things are tightening up. For instance, turnover rates have risen, reaching a level this year that hasn’t been seen since the economy hit its last peak in 2007.
Similarly, our Employment Outlook survey shows strong hiring projections for the upcoming quarter. Employers’ plans for adding technical and professional staff are particularly robust, having strengthened dramatically since the 2008 recession.
In fact, more than one-third of the surveyed employers plan to increase their technical/professional workforces in the final three months of 2016. This is the eighth consecutive quarter in which planned expansion of technical/professional staff has surpassed 30 percent, marking the longest streak in the survey's history.
When it comes to finding people for all those positions, employers are having an increasingly tough time. The share of employers reporting difficulties filling some technical and professional jobs climbed to 55 percent in our latest survey.
And employees seem to have a sense that they’re in higher demand, as evidenced by their lack of patience with employers. A recent survey from the staffing agency Robert Half found that 23 percent of job candidates lose interest in a company if they haven’t heard back within a week of being interviewed, and 46 percent lose interest if there’s no contact within two weeks.
If history repeats itself, the competition for talent will get increasingly intense as long as the economic expansion continues. That means employers will have to step up their game in order to avoid having their business plans short-circuited by a shortage of human capital.
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