CHART OF THE DAY: There's almost no one left to fill your open jobs

I am an absolute mark for big picture labor market data. And the best, most interesting regular look at labor market data os the Bureau of Labor Statistics monthly Job Openings and Labor Turnover Survey report, better known as the JOLTS report.

Federal Reserve Chair Janet Yellen has stated that the JOLTS report is one of the most important data sets she relies on when pondering the Fed's decisions on monetary policy, and if the JOLTS is good enough for J-Yell then you had better believe the rest of us should be paying attention to it as well.

For today's Chart of the Day, take a look at what's happening with the ratio of unemployed persons to current job openings - a fixture of the JOLTS data. First the chart, then some comments from me after the data.

Some quick thoughts on the data:

1. When the most recent recession began (December 2007), the number of unemployed persons per job opening was 1.9. The ratio peaked at 6.6 unemployed persons per job opening in July 2009 and has trended downward since. The ratio at the end of July was 1.3 unemployed persons per job opening. This represents the all-time low in the ratio since it has been calculated by the BLS.

2. In addition, the very same JOLTS report shows that the denominator of the ratio, the number of current job openings in the US is also at a record level, hitting 5.9 million at the end of July. 

3. This data reminds us that it is both a great and terrible time to be in recruiting/talent acquisition. Let's start with the terrible part. For lots of jobs and locations there simply are not enough (qualified for sure), candidates to form an adequate pipeline for the roles you need to fill. There are fewer unemployed persons overall, workforce participation rates remain really low by historical standards, (a subject to its own), and lots of people with desirable skills are coming to terms with their power and negotiating leverage in the market. When you have to pry someone away from the job they already have, that gives a little bit of power to the person that in worse economic times they would not enjoy.

The good news is that the same JOLTS report that shows the ratio of unemployed persons per job opening is at an all-time low, also shows that the 'Quits' rate, i.e., the percentage of workers who are voluntarily leaving their jobs continues to trend upward - hitting 2.0% in July, which equates to about 2 million quits. In other words, workers continue to express confidence in the labor market and willingness, (almost at a pre-recession rate), to quit the job they have now, to (in theory), take the job you are trying to fill. If you can make a compelling offer, chances are at least decent you can pry someone out of where they are now to take it. And you may have to as the unemployed/jobs ratio continues to fall, and nothing seems to be significantly moving the needle to entice more people back into the workforce who are currently on the sidelines.

There is plenty more in the report, but I think you get the idea and I will leave it to you to dig in more. The JOLTS report should be your monthly must-read if you are interested at all in what is happening at a macro-level in the US labor market. Bookmark this page and thank me later.

Have a great weekend!

Three quick 'Gig Economy' links and a warning for HR leaders

There are about 12,238 surveys and data points that you can unearth when researching the rapidly evolving, and probably growing, 'gig economy', i.e. work that is performed by independent contractors, self-employed types, and those that for better or worse, (worse), get referred to as '1099 workers', for the IRS form on which their earnings are reported.

Rather than spit out a bunch of (sometimes contradictory) data on how and where this gig economy is heading, I wanted to share three quick and interesting developments in this area that are worth thinking about and then one more recently released set of survey data that should be a warning to HR and business leaders that are moving towards increased usage and reliance on 'gig' workers.

Item 1 - Atlassian now lets you hire freelancers right from Jira

JIRA, Atlassian’s flagship project management service, is getting a new feature today that will let you easily convert JIRA tickets into job postings on Upwork’s freelance marketplace. “The smartest people will always exist outside of your company,” Atlassian’s head of growth for JIRA and Bitbucket Sean Regan told me. For many companies — and especially small startups — it’s also hard to have all the right expertise available in-house to solve every problem. With this new integration, these companies can now click a button in JIRA and get a pre-populated form to submit to Upwork’s marketplace.

Steve here - an example (of which we will see more I am sure), of enterprise technology and management tools integrated with sourcing/hiring platforms for 'Gig' workers 

Item 2 - LinkedIn enters the Gig Economy with an Upwork competitor

LinkedIn has created a freelance marketplace. Launched on Wednesday, "LinkedIn ProFinder" asks employers to submit contract jobs in categories such as design, writing, or financial services and promises to send them up to five free quotes from LinkedIn users in response. Over the last five years, the number of freelancers on LinkedIn has increased by 50%, according to the company.

Steve here - Of course it makes sense for LinkedIn to dive in more heavily into the 'Gig' work space. It's growing, and LinkedIn thinks/knows it has the way to connect gig workers with opportunity

Item 3 - This CEO says he was shut out by tons of investors in Silicon Valley for classifying his workers as W-2 employees

But Josh Bruno, the CEO of senior-care startup Hometeam, said that for him it was always clear that Hometeam's 1,000-plus caregivers needed to be on W-2s. They needed a lot of training, and Bruno wanted to give them the sense that Hometeam was investing in them for the long haul.

But unfortunately, when Bruno was trying to raise money, that wasn't what Silicon Valley VCs wanted to hear.

"I was kicked out of every office on Sand Hill Road," Bruno said, referring to the iconic street that houses many famous Silicon Valley VCs. Bruno said he even had a verbal agreement with a "flashy name" VC, who then wouldn't go through with the investment unless Bruno put his workers on 1099s.

Why? One reason, Bruno said, is because big names like Uber and Lyft were doing it. Bruno's main competitor, Honor, which was named one of Business Insider's hottest San Franciscostartups to watch in 2016, originally used 1099s. It has since switched to W-2s.

But it wasn't simply because everyone was doing it, Bruno said. The deeper reason rested in what a 1099 represented.

Bruno said that to VCs he spoke with, a 1099 meant a job that was both easy and repeatable. The worker is a part that can be swapped in, which is good because it means the business will be easier to scale, Bruno explained. And it would be easier to get the kind of growth the VCs were looking for.

Steve here - In case you wondered what the general attitude of 'people who have money and are looking to have more money' is towards labor, there you have it. 'Gog' workers are cogs, more or less the same, more or less interchangeable. This isn't a problem until.... Well, let's ask some of the Gig workers.

And as promised, here's your warning, 67 percent of Americans who have worked as independent contractors would choose not to do so in the future (infographic below courtesy of Deloitte).

A recent online poll by Deloitte of nearly 4,000 workers found that 67 percent of respondents who have worked as an independent contractor would choose not to do so again in the future. Additionally, more than 60 percent of employed workers said that their stability would suffer if they moved to independent contract work, and 42 percent worry about sacrificing good compensation and benefits.

Steve here - Lots of interesting nuggets to take away from the Deloitte data, but they all point to the same place - that many, many 'Gig' workers are not at all happy to be Gig workers, and that most organizations are doing a terrible job managing and engaging these gig workers. it's almost as if the Silicon Valley VC attitude towards labor is taking hold and becoming more common.

The danger is at the same time you as an organization make the strategic move to increase your use of Gig workers, and the tools and technologies are making it easier for you to incorporate Gig workers into your processes and workflow, that the way we value, treat, and support Gig workers seems to be getting worse. And lots of Gig workers are not happy.

Plenty to think about here as the next few years play out.

Have a great week!

Have to advise your kid on their college major? Here's some data you may want to review

Time to dig into some labor market data!

(Note: all the data referred to in this post can be found courtesy of our pals at the BLS. While their site isn't the easiest to navigate, you can start at the 'Employment, Hours, and Earnings' page to get started with this kind of analyses).

I had a chat with a friend recently who was sending their child off to his or her, (I can't remember which, does not matter), first year of college this month. In the conversation I faked genuine interest by asking what the child was planning to choose as their major. I think the answer was 'Business' or 'Physics', like I said, I was faking interest at this point, but the entire conversation made me think about just what 'should' the child have chosen, forgetting for now what they are interested in/good at. If the child wanted to make a purely rational, economic decision, what might be the direction to head in terms of college major?

I confess to not knowing the answer, but a recent piece from the Nieman Lab about trends in employment in selected information industries, (copied below), at least provides one set of data points to (hopefully), better inform these kinds of economic decisions. Take a look at the Nieman Lab chart, (knowing by accessing the BLS data in the link above, you could create similar charts across other or all industry classifications), and then some comments from me after the data.

The point of the Nieman Lab piece was more or less 'Gee, what a crappy last decade it had been for the newspaper business, and the people working in it', but examining this kind of data a little more broadly can be instructive on a number of levels.  Sometimes this kind of data validates what we think we know or have observed in our own lives - do you know anyone who actually reads a newspaper anymore?

Other times the data can be a bit surprising too. I personally had no idea that employment in Motion Picture and Video Production had just about doubled since 1990. Are there really that many more films being made? Besides the Sharknado series I mean?

Back to the original question raised in the post - what should someone making what they hope to be is a rational, economically sound decision choose for their college major? 

Some topic or subject that maps easily to an industry group we think holds bright employment prospects for the future? 

I still have no idea I suppose. But at least I would tell them to not plan to work for a newspaper after they graduate. 

And then I would take a minute to explain what a 'newspaper' is.

Happy Wednesday. Have fun with the data.

Every business is a talent business, retail edition

Over coffee this morning I caught an interview with Macys CEO Terry Lundgren who was a guest on CNBC discussing the retailer's latest quarterly results, (which were surprisingly positive for a company that like many in the retail industry has been struggling of late).

During the interview about the positive results and momentum that seem to have buoyed the company in the 2nd quarter of 2016, one of the CNBC reporters questioned Lundgren about the key drivers of this shift and hopeful turnaround in Macys business. Here's the question, (paraphrased a little), and then Lundgren's response, which I found really interesting.

Reporter: :What is the most important thing you are doing to change the business, is it inventory management, is it physical changes to the stores, or is it the increased investment in digital and e-commerce?"

Lundgren: "I think the biggest single thing that we did was that we decided to invest in people and putting more people back on the sales floor in advance of the performance of the business. So it was a bet so to speak. In a retail business like ours with so many stores, the biggest expense you have is your salesforce on your floors. So investing millions and millions of dollars back into that part of the business before the business turned around was the biggest bet that we placed in the beginning of the 2nd quarter. That to me, because I am watching what we call our 'Magic Scores', which are our customer service scores every single month now improving and going in the right direction. And I think that investment in people has had the biggest positive impact."

There is a popular saying, I think that even has been repeated on this blog from time to time, that 'Every company is a tech company', alluding to the fact that transformative and disruptive technology-driven change has redefined business, markets, competition, service delivery, communication, and pretty much everything else. And while I do believe that sentiment is largely true, and the most successful companies will be the ones that can adapt to and exploit new technologies the fastest, we can't ever let the 'talent' part of the popular Culture--Strategy--Talent triangle go wanting.

Is was surprising and refreshing to hear the CEO of huge organization attribute smart investments in talent as the primary driver of what he and Macys hopes to be a sustained turnaround in business fortunes.

It's never all about new technology. It's never all about the best business strategy. And it's never all about assembling the best talent. It is all about finding the balance between all three, and knowing, as seems to be the case with Macys, when to shift investments and attention to shore up the side of the triangle that may be lacking, and the one that has the greatest opportunity to impact customers and results. 

Every business a tech business today. Sure.

But even if you don't buy that, you have to agree that every business ,truly, at the end of the day, is a talent business.

Where workforce planning, talent attraction, and facilities strategy meet

Quick shot for a busy summer Friday, (isn't every Friday now a busy Friday?), and a quick reminder on just how important workforce planning and talent attraction and acquisition challenges are towards making big, hairy organizational decisions like 'Where should we build the factory?' and 'Should corporate HQ be in some massive office park in the suburbs (near the affluent towns where all the C-suite lives), or within the city limits, (where the millennials all want to live?).

Take a quick Friday or weekend read of this piece from the New York Times titled "Why corporate America is leaving the suburbs for the city' to get a feel of how these dynamics and interplay between HR, talent, culture, and organizational strategy are playing out for companies like McDonald's, Motorola,  and General Electric.

An excerpt from the piece (and you really should read it all):

For decades, many of the nation’s biggest companies staked their futures far from the fraying downtowns of aging East Coast and Midwestern cities. One after another, they decamped for sprawling campuses in the suburbs and exurbs.

Now, corporate America is moving in the other direction.

In June, McDonald’s joined a long list of companies that are returning to downtown Chicago from suburbs like Oak Brook, Northfield and Schaumburg.

Later this month, the top executive team at General Electric — whose 70-acre wooded campus in Fairfield, Conn., has embodied the quintessential suburban corporate office park since it opened in 1974 — will move to downtown Boston. When the move is completed in 2018, the renovated red brick warehouses that will form part of G.E.’s new headquarters won’t even have a parking lot, let alone a spot reserved for the chief executive.

Why are these companies heading back into the central, urban areas that many of them exited for the (literally) greener pastures of the suburban corporate office park back in the last 20 - 30 years?

Like we do for everything else, it's time to blame the millennials. More from the Times piece:

The headquarters of Motorola Solutions will start moving to downtown Chicago on Aug. 15, though more workers will stay in suburban Schaumburg than move to the new offices near Union Station. But for the first time in half a century, top executives from the company will again be in downtown Chicago.

“Where you work really matters,” said Greg Brown, the chief executive of Motorola Solutions. “No disrespect to Schaumburg, but customers and new hires didn’t want to come to the suburbs an hour outside of Chicago. We wanted energy, vibrancy and diversity, and to accelerate a change in our culture by moving downtown.”

“This was the right thing in terms of strategy,” he said. “Millennials want the access and vibrancy of downtown. When we post jobs downtown, we get four or five times the response.”

On the surface, it all makes sense, and isn't really all that complex. These companies and others are finding it harder to draw the new, often technical talent they need to some far-flung corporate outpost an hour from the city center whose primary draws are things like 'good schools' and 'ample parking' - things that don't often attract childless, Uber-preferring younger workers.

But HR folks that have dialed in their workforce planning and talent attraction strategies to help inform the CEO and COO on matters such as these can't simply rest now that they have made the big call to relocate the company HQ back into the city. Eventually these new workers start to get a little older, start to think about wanting the things that make the suburbs attractive in the first place - the schools, the Whole Foods, the 1.2 acre lawn, etc. 

What happens then? Does the organization head back out to the 'burbs? Do you keep a 'millennial-friendly' presence in the city regardless? Workforce planning has always been important, it is just getting harder I think than it used to be in the past.

The best HR/talent advisor needs to have a little bit of cultural anthropologist in them I think, to better inform their organization's workforce and talent plans with at least an educated guess on what things outside of work are going to be important to the people that do the work. And where they want to live might be the most important of all.

Have a great weekend!

Also, in case you missed it - BIG news from the HR Happy Hour Show this week, read all about it HERE.