One reason there are so many open jobs in the USA right now

The very best macro-economic report that helps to shine a light on current labor market conditions is the Bureau of Labor Statistics JOLTS (Job Openings and Labor Turnover Summary) report.

The JOLTS report covers job openings, hires, total separations, quits, layoffs, and other discharges, and offers us lots of interesting data points to better understand the US labor market - and by proxy, the health of the US economy.

Last month's JOLTS release, on May 8, included one pretty remarkable number in its summary - the number of job openings in the US as of the end of April had risen to 6.6 million - an all time high since the data series began to be compiled in 2000. 6.6 million open and unfilled jobs. That is a lot of openings. No wonder every time I go out I see a bunch of 'Help Wanted' signs.

Jobs stay open, or perhaps better said, remain unfilled, for a whole bunch of reasons - most of them pretty good reasons. Taking time to sort, screen, and interview candidates; trouble finding the right skill set for specific roles; companies taking the extra steps to really be sure a candidate is a good fit before making a hire - these and more are all decent reasons why jobs stay open.

But I have another reason, and some research, I want to point you to that is another reason why some jobs remain open, and open longer than perhaps they should be. It's the concept of 'degree inflation' - the tendency of employers to require that candidates possess more advanced educational degrees than the job function truly requires, and that many candidates simply do not have.

Over the weekend I read a really interesting report on the subject of degree inflation, what it means, where and how often it is occurring, how it negatively impacts the organization, and finally, offering some suggestions for employers to avoid unnecessary degree inflation when hiring.

The report, titled 'Dismissed by Degrees: How degree inflation is undermining U.S. competitiveness and hurting America's middle class'by authors Joseph B. Fuller and Manjari Raman, both from the Harvard Business School, is an interesting and deep look at just what happens when companies try to use artificial degree requirements as a screening tool and a proxy for candidate skills and suitability for a given role.

This is a long report, and I definitely encourage you take some time and read it through, but here are the top three most interesting points or pull quotes from the study that I want to share.

1. In an analysis of more than 26 million job postings, we found that the degree gap (the discrepancy between the demand for a college degree in job postings and the employees who are currently in that job who have a college degree) is significant. For example, in 2015, 67% of production supervisor job postings asked for a college degree, while only 16% of employed production supervisors had one.

2. Seeking college graduates makes many middle skills jobs harder to fill, and once hired, college graduates demonstrate higher turnover rates and lower engagement levels. A systemic view of the total economics of hiring college graduates shows that companies should be extraordinarily cautious before raising credential requirements for middle skill positions and should not gravitate toward college graduates based only on a vague notion that it might improve the quality of their workforce.

3. Degree inflation particularly hurts populations with college graduation rates lower than the national average, such as Blacks and Hispanics, age 25 years and older. In addition, degree inflation raises the barriers to entry for Opportunity Youth, the nearly six million young adults who are currently not in school or in jobs. Companies that insist only on a college degree deny themselves the untapped potential of eager to work young adults as well as experienced, older workers as pools of affordable talent.

Really interesting and plenty to think about in just those three short pull quotes from the report. Even when current holders of a given role in the organization largely do not hold college or advanced degrees, many companies try to require said degrees for new hires into the same role. Then when companies do manage to hire candidates that are say, 'over-degreed' for a role they have to pay them more, the new hires are less engaged, and are more likely to leave - driving up costs and starting the entire process all over. And finally, imposing artificial degree requirements on roles effectively screens out groups of candidates disproportionately and may make any organizational diversity hiring initiatives even harder to progress.

The conclusion of the report does offer some solid suggestions to reduce or eliminate the degree inflation tendency, (chiefly having a better understanding of the critical skills and competencies needed to perform in a given role, and a broader understanding of how candidates can demonstrate these skills), I won't run through them all here, but take a few minutes to read through them as I think most organizations can pretty easily take steps to better understand this issue and make adjustments and changes to their hiring practices.

There are 6.6 million job openings in the US right now. I bet a fair number of them have 'Bachelors Degree' listed as a requirement, when, if we were to be honest, it isn't really required.

Have a great day!

The challenge of recruiting for a job we think is going away

If there is one job in the American labor force that presents an incredibly interesting, complex, and important case study on supply and demand, price economics, the impact of automation on work, and the current and future labor force it is the job of commercial truck driver.

A couple of important statistics to keep in mind before we wade into some of the details that make commercial trucking so darn interesting, (at least to labor market and automation geeks like me).

According to the American Trucking Association there are about 3.5 million commercial truck drivers in the US. And 71% of all the freight tonnage in the country is moved by truck. Finally, according to the BLS, truck drivers earn an average of about $24 an hour, and have an average age of about 55 years old.

There are a couple of other factors specific to commercial trucking that tend to make it a difficult job to perform and to recruit for - traditionally new entrants have had to fund their own, expensive training and certification, for new drivers, the hours and time away from home are significant, the job itself is stressful, hard, and tends to foster really unhealthy habits, (poor sleep, fast-food, little exercise), and finally, and perhaps most importantly, commercial truck driving has been increasingly seen as being a job that can and will soon be replaced and disrupted by automation. Estimates of the impact of automation on commercial truck driving vary, but one representative example from Goldman Sachs, estimates that as many as 300K trucking jobs will be lost annually, once self-driving trucks become more widely adopted.

Factor all of this in, the hard lifestyle, the relatively low pay, the looming threat of automation making many of these jobs redundant - oh, I didn't even mention the federal regulations making most of these jobs not available to workers under 21 and the strong market for alternative jobs in construction and energy luring many of the trucking industry's target candidates - and you would probably bet that the US economy is not producing as many new truck drivers as it has in the past.

And you would be right. But the problem of many US companies, (and consumers), is that while we wait for Elon Musk's fleet of autonomous semi-trucks to take over American highways, and in the age of increasing demand for shipments (driven by the strong economy and Amazon Prime), the industry is seeing an increasing shortage of commercial truck drivers.

Here's a chart from the American Trucking Association illustrating the problem facing the trucking industry shown as the estimate of unfilled truck driver jobs:

According to the ATA's estimates, there could be as many as 180,000 trucking jobs unfilled within 10 years. And that kind of a shortfall, should it indeed play out that way, will have a pretty significant ripple effect throughout large swaths of the economy.

Wages and benefits for truckers, which have been increasing steadily, will have to continue to rise. The transportation companies will have to pass these costs to their customers - manufacturers and retailers and commodity producers - who will past them on to their customers, who will pass them on to you and I. And the development timeline for the kinds of autonomous trucks that might stand in for the human truck drivers will have to accelerate.

But in the meantime, at least the next 5 or 10 years, if the current trends hold, the US economy and labor market is going to have to find a way to recruit and retain more truck drivers. And lately, it seems like the transportation and other companies have not really cracked the code on just how to do that.

A tough job, with lots of stress, with relatively poor to average pay, that we keep writing breathless stories about how it will soon be made obsolete by technology, with an aging cohort of workers currently in place, might represent the toughest recruiting challenge in recent memory.

Sure, everyone likes to think 'tech' recruiting is hard, and it probably is. But I would wager a good commercial trucking recruiter would be worth their weight in whatever it is their company needs to get from one side of the country to the other.

Anyone out there doing this kind of recruiting? Would love to hear how it is going on the front lines.

Have a great week!

PODCAST: #HRHappyHour 321 - The New CHRO Agenda and a ServiceNow Update

PODCAST: #HRHappyHour 321 - The New CHRO Agenda and a ServiceNow Update

Sponsored by VirginPulse - www.virginpulse.com

Host: Steve Boese

Guests: Pat Wadors, Chief Talent Officer, CHRO; Deepak Bharadwaj, VP, GM, HR Business Unit; Jen Stroud, HR Evangelist, ServiceNow

Listen HERE

This week on the HR Happy Hour Show, Steve recorded live from the recent ServiceNow Knowledge18 event in Las Vegas.

In this two-part episode, Steve was joined by ServiceNow's CHRO and Chief Talent Officer Pat Wadors to talk about some of the key findings and trends that were discovered in ServiceNow's recent research report titled 'The New CHRO Agenda'. Pat talked about HR and digital transformation, the role of the CHRO in employee collaboration, and her view that 'HR is Sexy' and how the fundamental role of the HR leader is to unlock people's power and potential.

Then in Part 2 of the episode,  Deepak Bharadwaj and Jen Stroud from ServiceNow shared some details about the ServiceNow platform, its history in IT and Customer Service management and how that benefits and informs their HR solutions, and how some organizations are leveraging the platform and its new capabilities in automation, AI, and chat to help create great employee experiences.

You can listen to the show on the show page HERE, on your favorite podcast app, or by using the widget player below:

This was a fun show - thanks to our friends at ServiceNow for having us at the event.

Remember to subscribe to the HR Happy Hour Show on Apple Podcast, Stitcher Radio, or your favorite podcast app - just search for 'HR Happy Hour.'

PODCAST: #HRHappyHour - Oracle Spotlight: Innovation in HCM Technology

HR Happy Hour - Oracle Spotlight - Episode 2: Innovation in HCM Technology

Hosts: Steve Boese, Trish McFarlane

Guest: Gretchen Alarcon, Group Vice President, Product Strategy, Oracle

Listen HERE

This week on the HR Happy Hour Show, hosts Steve Boese and Trish McFarlane continue a special series of podcasts with our friends at Oracle HCM. On Episode 2, we are joined by Gretchen Alarcon from Oracle to talk about innovation in HCM technology, and how HR leaders can best position themselves and their organizations to take advantage of these innovations. On the show, we talk the importance and impact of migrating HCM solutions to the cloud, the emerging influence of AI and machine learning in HCM technology and what that means for HR, and how user focus and user experience are driving much of the most exciting innovations in HCM technology.

This was a really interesting conversation and one we will build on in upcoming episodes of the Oracle Spotlight series.

You can listen to the show on the show page HERE, on your favorite podcast app, or by using the widget player below:

Thanks to Gretchen for joining us and thanks to our friends at Oracle HCM for making this series happen.

Subscribe to the HR Happy Hour Show on Apple Podcasts, Stitcher Radio, or wherever you get your podcasts - just search for 'HR Happy Hour'.

CHART OF THE DAY: Your semi-regular labor market update

Two quick charts on my favorite CHART OF THE DAY topic - the trends in macro labor force dynamics in the United States.

First, the big headline from a few days ago, the official unemployment rate in the US dipped below 4% for the first time since late 2000, ( was the ) hitting 3.9% as of the end of April 2018.

For a look at this headline trend, see the below chart from our pals at FRED:

And while this dip below 4% for the first time in almost 20 years was what most reports about the state of the labor market honed in on, (and probably rightly so), the 'truth' of the health of the labor market usually resided in other metrics. Like, for example, one of my favorites - the length of time it takes organizations to fill an average open position.

Here's the latest on that - from the DHI-DFH "Mean Vacancy Duration" data (the latest I could find on this is from the end of February 2018).

While you can see some upticks and downticks in the average time to fill, the trend since the end of the recession in 2009 is clearly up and to the right - meaning it continues to take longer and longer for most companies to fill open jobs. Officially, the mean vacancy duration for February 2018 is at 28.9 working days - essentially over a month to fill any open job.

If you did into the details of the report, (and I did, since I am a weenie), one number really stood out. It now takes over 21 working days to fill roles in the hospitality and retail sector - think hotels, restaurants, fast-food, retail stores. That number is up dramatically from its 'bottom' of about 14 days just a few years ago. You would think that these roles should be the easiest to fill, and maybe they still are, but even today's easy roles to fill are taking longer and longer to actually be filled.

There is more to this story, and I need to take some time to look at what is happening with wage data, labor force participation, and the openings and quits rates, but these two charts and their data are both pretty revealing.

It's probably a good time to be a job seeker, all things being equal.

And it is also a good time to be a recruiter - a good one anyway, because your value to organizations keeps growing.

That's it from me - have a great day!