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    Entries in labor (73)

    Friday
    Jun292018

    How tight is the labor market? One retailer is already taking applications for the holidays

    You've seen the headlines, (or heard me talk about them on the HR Happy Hour Show), unemployment is really low, the number of posted job openings has never been higher, and companies of all kinds are reporting that finding and retaining talent continues to get tougher.

    Just how tough is it out there?

    Well here we are in late June and Kohl's, a major US retailer is already accepting applications for holiday (think Christmastime), seasonal workers for their stores. Here's the details from a piece on CNNMoney:

    The department store announced Wednesday that it is already accepting applications for seasonal positions. Kohl's is staking an early claim in a tight job market that has made it hard for companies to find workers.

    Kohl's is filling jobs at 300 of its 1,100 US stores for the back-to-school and holiday seasons. Additional jobs at stores and fulfillment centers will come open later in the year.

    It's the earliest Kohl's has ever started hiring seasonal workers, said Ryan Festerling, the store's executive vice president of human resources.

    Unemployment is 3.8%, the lowest since 2000. For the first time in at least 20 years, there are more job openings than people looking for work.

    A couple of quick thoughts on this move by Kohl's to get a jump start on holiday seasonal hiring:

    1. Kohl's is signaling, and I bet they have the internal data to back it up, that holiday hiring is going to be really, really tough this year for lots of reasons we've mentioned above. Starting as early as they can, they are hoping, will help them fill the roles they need by the dates they need them filled by.

    2. For the talent pool for retail holiday season help, Kohl's has gotten ahead of the likely competition for these workers. This story has been in the news a fair bit, and people who are thinking about looking for these kinds of jobs this year might consider Kohl's before other retailers - especially since they can apply right now.

    3. Despite all the talk about the end of retail and the inevitable domination of online shopping and Amazon, physical retail still matters. Lots of people work in these stores, and with a strong US economy, most of the large retailers will be looking to add staff for the holiday rush. Heck, maybe I will pick up a few hours this year over at the local mall.

    That's it for me for a summer Friday - have a great weekend!

    Wednesday
    Jun062018

    CHART OF THE DAY: Job Openings Continue to Increase to New Record Highs

    I know I've covered this territory a hundred times, it seems like every month lately, but I feel compelled once again to share the headline number from the monthly Bureau of Labor Statistics  JOLTS (Job Openings and Labor Turnover Survey) Report released earlier today.

    Here's the headline (and an accompanying chart from our pals at the St. Louis FED) - Total Job Openings have climbed to 6.7 Million - reaching another new record high in the history of the data series.

    The steady increase in record high job openings has been one of the truly amazing developments in the aftermath of the financial crisis and recession, which saw openings bottom out at about 2.2M in July 2009.

    The questions are now twofold I think. One, just how high is the ceiling for US job openings to climb towards? I mean these records continue to be set even while trade wars are constantly in the news and many financial and labor markets observers have no idea what strange 'news' emanating from Washington might do to the market and the economy?

    And two, when and by how much do we begin to see a much more pronounced increase in wage growth, as companies are finally forced to increase wages in order to try and fill these millions of openings? The sluggish nature of wage growth in the face of seemingly and endless supply of open jobs has been one of the must puzzling aspects of the labor market in the last several years. Something has to give soon, right?

    It's a good time to be looking for work, I would say.

    Have a great day!

    Wednesday
    May232018

    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!

    Tuesday
    May082018

    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!

    Monday
    Mar192018

    What the Toys R Us meltdown reminds us about workforce trends

    By now you probably have seen the sad news that Toys R Us is in bankruptcy, and is facing the likely closure of its 700+ stores in the US in the coming months.

    Definitely a sad day for many, especially for the thousands of Toys R Us employees soon to be out of work, and for the let's say 'traditionalists' among us who still enjoyed shopping for toys and games and the like in the 'real world', and not just from an Amazon app.

    Of the many reasons that have been blamed for Toys R Us demise, competition from Amazon (and others) is frequently cited, along with the pretty staggering amounts of corporate debt and debt service payments that Toys R Us has been burdened with since its acquisition by Private Equity companies in 2005. Other post-bankruptcy analyses have pointed to Toys R Us failure to modernize its shopping experiences, inability to grasp digital commerce trends, and the fact that they lost touch with their most important customer - mothers shopping for their kids.

    But there is one other factor that has contributed to the toy retailer's plight, one that has not been mentioned as much in the coverage, and one that has much wider implications in work and workplaces as well. And it is this: people in the US are having fewer children, thus creating fewer of Toys R Us' prime 'end customers', and, eventually, fewer entry-level workers for all US firms to recruit.

    Here it the thing, the folks running Toys R Us maybe couldn't figure out what to do about this trend, but they did see it coming. Here is an excerpt from their most recent 10-K financial filing from April 2017:

    "Most of our end-customers are newborns and children and, as a result, our revenues are dependent on the birth rates in countries where we operate," the filing reads. "In recent years, many countries' birth rates have dropped or stagnated as their population ages, and education and income levels increase. A continued and significant decline in the number of newborns and children in these countries could have a material adverse effect on our operating results."

    Data from the CDC in the US backs that up - the most recent data available from 2016shows the US birth rate hitting a record low, and with no obvious sign of this trend changing, retailers like Toys R Us are going to face continuing pressure. Longer term, if this trend does continue, all kinds of employers will face pressure too - a different kind of pressure perhaps, this one stemming from relatively fewer entry-level or younger candidates, as well as the need to create workplaces that are more open, accommodating, and available to older workers too.

    Since I love charts, I will close with this one, from our pals at FRED - a look at the increase in the 65+ labor force in the US over the last 20 years or so.

    I will spare you trying to squint at the small print, but the total number of workers aged 65+ has more than doubled since 2000 - with almost 10M people in that group as of the latest data. And even if you can't read the small print, it is easy to see the 'up and to the right' trend in the data.

    Fewer babies and young kids means trouble for Toys R Us in 2018. It could mean recruiting problems for your organization too, in a few years. Don't wait until it is too late, like our pals at Toys R Us, to know how to react.

    Have a great week!