In advance of the Bureau of Labor Statistics (BLS) monthly Employment Situation report on July 7, 2017, the RIX team sat down with Joanie Courtney, workforce expert, national news contributor, and staffing industry veteran to get her take on the upcoming jobs report, market trends impacting employment in the United States, and what staffing firms and the leaders that run them can do to make a difference.
Thanks for taking some time to look into your crystal ball with us! Given the steady gains the U.S. economy has seen over the past few months in terms of jobs added, what do you anticipate for the July 7 jobs report?
I wish I had a crystal ball so I could see what was going to happen! I’m not that lucky but I can share my expectations based on decades in this industry. The May 2017 jobs report only created 138,000 jobs in the U.S., and the expectations were north of 200,000. There are some interesting dynamics in the market right now impacting these numbers. One being that job openings are at an all-time high. There are currently 6 million job openings in the U.S. according to the BLS’ JOLTS report and that’s on the rise. With job openings at this level, you’d expect to see jobs added exceeding 200,000 or 300,000 a month. Pair this with the skill shortages and lack of qualified talent to fill these open jobs, and it’s getting harder and harder to predict what the jobs report will indicate consistently. I do expect that we will see job creation of approximately 180,000 to 200,000 jobs in the United States. I would also expect that unemployment is going to hover around 4.3%. We still have under 7 million unemployed workers that are struggling to find employment. I don’t think that number is going to move that much.
What factors are contributing to robust job growth? Where is there still consistent opportunity?
One interesting indicator to watch is the labor force participation rate which currently stands at 62.7%. This measures how many people are participating in the workforce (either employed or say they want to work). Unfortunately this number represents a 45-year low. The reasons for opting out of participation vary greatly: with more new mothers opting to stay home instead of return to work, Millennials pursuing secondary education in lieu of starting their careers, and Baby Boomers delaying retirement being a few. Hourly wages are often a hot topic when discussing the job market and labor participation rate. The Federal Reserve is watching for positive trends, especially as wages have remained stagnant over the last few years. Wages were expected to come back to a level of 3-4% in the recovery but they have been hovering at 2% on a year-over-year basis. I’m expecting to see positive changes soon as companies recognize that they need to offer wage increases to attract new talent and retain existing talent. That’s a trend we see in the staffing industry as well so we focus on educating our customers on compensation trends so they can stay competitive.
Another factor impacting growth is the disconnect between the skill sets, training, education, and experience necessary to fill the jobs available. Although there is consistent opportunity in sectors like finance and accounting, technology, and healthcare, the job openings in these areas persist. For example, if you look at 6 million online openings, over 500,000 are for registered nurses. There is a strong demand in healthcare across many roles, including doctors, nurses, PAs, and administrative jobs. We’re not finding the skilled, experienced talent to meet the demand that’s in the marketplace.
Speaking of healthcare specifically and the uncertainty that exists in the United States when it comes to healthcare reform, what should employers be considering?
There are a few different angles to look at when discussing healthcare. A lot of the employment opportunities that were created in the healthcare industry are the result of our aging population, with no signs of job creation related to servicing this population slowing down. Technology advances that are rapidly changing the healthcare industry are also creating an incredible amount of opportunity in this sector. So in those regards, I believe there will continue to be strong job creation. When it comes to operating a business in the current environment, employers need to consider what types of jobs they can offer with healthcare coverage and penalties coming into the equation. There’s been a lot of conversation about the impact on small business growth which will be interesting to watch unfold. Again, I wish I had a crystal ball on this one to better understand the impending healthcare reform and the implications for the business community and employers’ approach to hiring. But too much is still unknown at this point.
You’ve referenced the difficulties in attracting and retaining great talent in this competitive landscape. Can you share a few strategies or tactics you’ve seen work?
Whether it’s in healthcare or other fields like customer service (which is one of top 10 job areas in the U.S. currently), I think companies today need to make sure they are doing everything they possibly can to brand themselves and highlight their employment brand appropriately. They need to sell their culture and the opportunity they offer someone. It’s necessary to think about the candidate experience, as well as their employee experience. We’ve seen that over the last few years that culture and employee experience have merged with the candidate experience and the company’s external brand in the marketplace. Everything is blending together. It’s important that as companies are advertising today they can put their best foot forward, differentiating themselves from the millions of other employers trying to hire out there.
Many companies are also looking at training, education, work-life balance, and flexibility (remote work) to stand out. Back to our wage conversation, there’s also an increase in reconsidering pay. In order to be attractive in a market with 4.3% unemployment, companies need to position themselves as an employer of choice that can offer many different benefits and perks that will be attract top talent: career path, education, and signing and relocation bonuses. I’m also seeing a rise in retention bonuses. Bottom line – there isn’t one strategy that works for everyone but companies need to be creative with their strategies to get noticed.
Where does the gig economy fit into this market landscape? Is the gig economy a friend or foe to the staffing industry?
There’s a huge opportunity for the candidate to participate more in the gig economy. Also, it’s my opinion that the staffing industry can promote the gig economy more to increase the labor participation rate. The gig economy is just starting to unfold in some ways, and in other ways it’s been around since people started working and doing side jobs. Through technology, there is a platform to participate more easily in the gig economy which can help attract some of the stay-at-home moms, Millennial students, and Baby Boomers that I referenced previously to participate in the labor market.
In terms of the impact on staffing, I can share the viewpoint specific to our firm. We see the gig economy as a friend. The gig economy is something that we’re investing in at EmployBridge and really think it can change the future of the workforce. We see it as an incredible opportunity at our company to connect people to jobs and companies to talent, in a mobile-first, digitized way. We want to deliver a great experience and there will always be a human element to staffing, but we do see the gig economy and technology platforms as one way to create quality matches as quickly as you can for the candidate in a way they want to engage: their mobile phone.
Where do humans fit in as you invest more in technology?
We’re investing in technology, but also improving the candidate experience with everything we do, especially when it comes to education and training. I’m thrilled with an announcement we’ll be making soon to offer our associates the opportunity to earn college credits at no cost as long as they’re working for us. That’s just one example of how we’re trying to create a good candidate experience. If we can help candidates improve their skills, we can keep placing them in great opportunities. I’m so passionate about this effort as we truly want to create a better life for our employees.
The many market factors we’ve discussed continue to make staffing a tough job! As an accomplished leader in this industry, how do you keep your teams motivated?
Again, what immediately comes to mind is the desire to create a better life for someone. I love my job and this industry because we get a chance to make a difference in people’s lives every single day. After more than 20 years working in staffing, I also know the importance of having fun along the way! We all know that there are challenges and competition in this industry. If you focus the vast majority of the time on the impact you can make on a person’s life or the difference you can make by providing a company with the talent that will take your company to the next level, you’ll keep going. Never forget that placing that one person in a job could make a huge difference to them and their ability to provide for their families.