Understanding What the Labor Statistics Indicate

File 6:  In today’s file, the team digests the latest Bureau of Labor Statistics numbers and their impact on recruiting and economic standpoint.  Why are they important and what difference do they actually make? 

For reference: https://www.bls.gov/news.release/empsit.nr0.htm

Jason begins with a brief explanation.  The monthly jobs report is a combination of narrative and tables intended to help individuals, businesses and other organizations to monitor the labor market.  This information assists in planning, forecasting and modeling for a variety of purposes.

In this report, the number of new jobs created was double what the economists expected.  Depending on your role, that could be good or bad.  For recruiters, that means there may be more competition out there trying to attract great candidates. 

The average hourly wage increased from $27.85 to $29.06, versus the same time last year.  This is a national number, so it may seem higher or lower than where you are located.  Jason recommends interacting with your local or regional workforce development team to get a better handle on your specific market.

The unemployment rate is 3.8%, a historic low.  But what does this really mean?  This represents individuals available and actively looking for work in the past month.  However, that number can be skewed.

The workforce participation rate is a more interesting number.  This is the percent of the population either working or actively seeking work.  In this report it was 62.8%, compared to a roughly 60% rate for the last year or so.  This might be a red flag.  As the Boomers retire, the workforce is getting smaller.  The younger generations have different work habits and preferences.  This rate is also seasonally adjusted.  Jamie observes that the report indicates we have more jobs and fewer people to fill them. 

Molley describes a period during which she was recruiting for architects and engineers.  There was significant shortage of candidates.  The college and university enrollment levels for these programs were down.  If you are trying to hire in these types of fields, it’s going to continue to be difficult.

What the Data Means for the C-Suite and the Recruiter

Jamie comments that 400,000 more people have part-time jobs, in addition to their full-time jobs, compared to last year.  Jason notes that this could indicate talent-acquisition teams are realizing the trends and may be pivoting by offering part-time arrangements, rather than requiring the role to be filled by a single, full-time employee. 

Some organizations resist the consideration of part-time arrangements.  She states it requires management and intentionality on behalf of organizational leaders.  It may be a good time to split certain roles into part-time segments, if it can be done.  Flexible location and hours are still preferred by prospective candidates.  It’s quite possible some of these candidates would maintain their full-time jobs due to current state of the economy.

Jason observes that the 400,000 number is interesting from a marketing standpoint.  He often works with large organizations to attract prospective job applicants via online platforms.  If you begin to break full-time positions into multiple part-time positions, you’re going to need to market to a wider population, thus potentially increasing your marketing spend for this hiring initiative.

Molley adds that by having more eyes on a particular project, the creativity and problem-solving capabilities would naturally increase.  Jason comments that it would be less of a negative impact if you were to lose a part-time employee vs a full-time employee, because you still have one or more people in the position.

Innovative Steps to Help Your Workforce

Jason comments how a client organization in a rural area has begun offering transportation services.  This provides a way to overcome transportation issues that might restrict or eliminate people from getting to work.  He admits it takes effort to implement the logistics, but definitely works well in the long-term.

Molley is dealing with a client organization that’s confronted with a similar transportation issue.  Some of the employees and prospective employees are challenged to get to the facility, because it’s not located near the bus line.  Figuring out a solution is very beneficial to the employer, but again, requires a level of intentionality.  She recommends that if the company is drawing from an area requiring 45 minutes to an hour to get to the workplace, implementing an internal, logistics program for those individuals would be a solid investment. 

Jamie returns to a topic discussed in a previous File (Packages – Peeling the Workforce Onion Part 2).  It’s the importance of having regular wage reviews.  Are your compensation packages still competitive in your area and industry?  The information you collect will help you develop a better plan to attract the right number of individuals for your workforce development needs. 

Jamie also notes that the tuition deferment programs are getting ready to expire.  Are you considering some type of tuition repayment support? Doing so could make your company and its open positions more attractive.

Organizational leaders have both the opportunity and responsibility to review policies that impact your team’s ability to effectively recruit.  There’s value in developing a culture focused on meeting employees where they are.  This means you have the ability to prepare to do good and great things for your organization.

As pay rates increase, as mentioned earlier, the workforce not only remains your most valuable asset, it also remains your largest expense.  However, there are ways of augmenting your compensation package, without actually increasing hourly wages.  Transportation, child care and other options help you to meet your workforce where they are.  It’s important for your recruiting team to be able to seek employee feedback and push that information to the C-Suite.

Advice to Recruiters about the Numbers

Molley offers some valuable tips and advice.  If you don’t understand how the unemployment rate or the workforce participation rate affects the jobs you’re trying to fill, it makes it more difficult to effectively communicate with your leadership.  While you may be gathering insights as to what candidates and current employees need, if you can’t correlate those needs with industry data, your recommendations won’t seem as solid.

You have the ability to be at the forefront of change.  You’ll be better equipped to add top talent and to drive value for both the company and the individual.  Molley challenges recruiters to learn the numbers and what they actually mean for your company’s success.

Increasing compensation adds pressure.  However, Molley recommends diving deep to understand your particular industry and your competition’s offerings.  Why would a prospective new-hire select a competitor over your company?  There’s also understanding the scope of the competition.

Molley uses the example of Louisville’s UPS World Hub.  There are many companies in a radius around Louisville that work in logistic, fulfillment and distribution.  If this is your segment, it may not be exclusively UPS you’re competing against.  Rather, it’s important to understand how your compensation packages stack up with the larger scope of competitors.  You need the statistics and information to craft a solid analysis of what you need from leadership to enable you to attract top talent.

Molley comments about how one of her clients offers employees a cell phone plan and that aspect of the package has resulted in a very high retention rate.  It seems relatively small, until you understand how that benefit directly impacts household budgets.

Carefully planning questions to determine what challenges, needs and desires a prospective candidate might have can uncover valuable insights into the compensation package you’re going to need to offer.  Obviously, this shouldn’t be interpreted as asking questions that are “off-limits” or might result in legal consequences.  However, you should intentionally pursue conversations to help you recruit that candidate.

In a previous episode, the team discussed how the power dynamic is changing.  Applicants and candidates have more leverage.  Both the recruiter and the individual are evaluating if this is a good fit.  Molley quotes a statistic that on average, essential workers apply for up to 10 different positions, at any given time.  You have to find ways to offer competitive comp packages, the right culture and requirements that meet both the company and the individual’s needs.

Altering the Fundamental Approach to Recruiting and Hiring

Jason offers an explanation of how and why the approach needs to change.  Traditionally, leadership will cast a vision, talent acquisition receives the objectives and attempts to execute.  Jason recommends both stakeholders review, analyze and consider the economic and employment reports on a periodic basis, especially during monthly, quarterly and annual strategy sessions.  The numbers are going to impact how you execute the plans. 

As a recruiter or HR specialist, you have the opportunity to mold your company and its future.  The situation may look different down the road, but the key is to avoid being stagnate and/or unaware of the trends impacting your talent pool.  Prepare your leaders to craft the proper policies and to focus on developing leaders throughout the organization who believe in and support those policies.

Procrastination is not your friend.  You have to intentionally block out time to think about these topics with your team.  Solutions don’t simply materialize.  You need time to analyze the opportunity, understand the headwinds, align the solutions with your company objectives and then to effectively present them to your C-Suite leadership.  It takes time.  Start soon.

The team suggests you actually forward this episode to your leaders and think through the issues together.  If you’d like help, our contact information is provided below.

That’s where we’ll leave the conversation for today.  Before we close the file, we invite you to reach out to us with questions, suggestions or other comments.  We’d love to hear from you.

Need Help Supporting Your Company’s Recruiting and Staffing Goals?

We’re here to help.  You can contact us via our individual websites, depending on your specific needs or questions:

·      Jamie Swaim, SPHR – www.ParcelKnows.com

·      Molley Ricketts – www.IncipioWorks.com

·      Jason Heflin – www.CrowdSouth.com 

 

We hope you found this file insightful and helpful.  Thank you for listening!