Amazingly, we are currently seeing government figures that show there are more open jobs (6.7 million) than people who are looking for a job (6.3 million). In fact, according to Michael Fraccaro, MasterCard's chief human resources officer, right now it's a candidate's market. This should be good news for anyone looking for employment.
Fraccaro goes on to say that while recent college graduates are concerned with pay and benefits, they are also concerned with how to contribute to society. With this in mind, consider that the market has drastically changed since the 2008 economic crash. In fact, it has become challenging for employers to fill positions, something that can easily have a negative effect on the U.S. economy. Employers are actually beginning to wonder where their workforce will come from and it's unsettling.
So what's the problem?
Since the U.S. economy is currently at full employment, we should expect there to be a balance between job openings and those seeking employment, according to Eric Thompson, associate professor of economics at the University of Nebraska-Lincoln and director of the school's Bureau of Business Research. The problem, then, has to do with demographics and labor market growth. Birth rates have been falling in the U.S.. for quite some time and are currently at a 30-year low. At the same time, we see that baby boomers are retiring, which drastically reduces the number of employed persons in the U.S.
According to Brian Kropp, group vice president for the HR practice of market research firm Gartner, there are two markets. One has highly educated and skilled candidates while the other market contains those with fewer in-demand skills and less education. For the most in-demand jobs, Kropp goes on to say that we see positions remaining open for five months or more. In this context of high-demand jobs, it is still an employer's market as these positions are fewer than others which do not require highly in-demand skills.
Right now, the unemployment rate is 3.8 percent, however, job seekers who do not have a high school diploma fall into the 5.4 percent range of unemployment. High school graduates have a 3.9 percent rate of unemployment, while those with a bachelor's degree or master's degree have a 2 percent rate of unemployment.
What makes the problem of unemployment worse even in a candidate's market has to do with geography. Many people simply do not want to risk moving to a new area for a job. For this reason, employers have been offering highly-competitive salaries, especially in the field of artificial intelligence (AI) since most of the workforce does not have the skills for this type of position, which can come with a salary somewhere between $400,000 to $500,000 per year for a master's degree in AI.
On the other hand, there is also a demand for skilled tradesmen, particularly maintenance technicians. Unfortunately, however, the growth is only seen at the top with wages remaining too low to fill these positions. Even when employers offer more money and benefits, this is only a temporary solution. For this reason, many organizations are retraining employees to get them more skills. They've also been automating departments where they can.
One issue that needs to be addressed is the amount of time it takes to hire someone. What's happening is employers think they have plenty of time, but by the time they do offer a job to a qualified candidate, chances are that the candidate has already taken another position, leaving the employer scrambling to fill the position. Employers need to be more decisive when trying to fill a position.
Another issue, according to Kropp, is that employers expect more than they are willing to pay without taking into consideration that candidates have other options. Some companies are willing to be more flexible in their hiring to solve this problem. For example, a candidate who may not have a college degree but is an expert hacker can successfully fill the same position as someone with a degree in cybersecurity.
Immigration is another route to solving the absent workforce problem. According to Phil Noftsinger, executive vice president at CBIZ Employee Benefits, immigration is extremely important right now as it is a quick way to garner employees. However, this is dependent upon changing immigration laws coming out of Washington.
So What Do You Do?
It's really crucial to stay open to the options and resources you have around you. There are a lot of things you can do to compete for talent, and one of those is partnering with a staffing agency. Start the conversation of teaming up with ICS by clicking below. We can help you gain an edge on the competition and give you viable options when you're searching for top talent.