The state of the job market: is it as tight as we hear?
The current unemployment rate is around 4 percent, hovering near the lowest we’ve seen since the late 1960s. However, the situation is not as simple as it seems, and the unemployment rate isn’t that low everywhere. The labor market is tighter in some parts of the country than others, and hiring and recruiting experiences vary for employers depend on their locations as well.
But why is it that some places have higher unemployment, which potentially gives employers more leverage, while others have workers in the driver’s seat and employers really scrambling to find talent? Geography and history offer a partial explanation. Some former powerhouses struggle after their leading industries or natural advantages declined. In contrast, places blessed with a diversity of growing industries, highly educated populations or desirable amenities attract people and jobs.
Although joblessness has fallen dramatically across the board, the unemployment rate remains much higher for African-Americans and Hispanics than for Asians and Whites and higher for people with less education.
In addition, the historically low unemployment rate isn’t the whole story. People who have given up looking for work are not counted as unemployed since they’re out of the labor force. Data suggests that, across working-age adults, including those out of the labor force, the share with a job is much improved relative to the recession but still below its peak in 2000. The labor market doesn’t look quite as tight when we count all the working-age adults as the unemployment rate suggests.
Four strategies for recruiting in a tight labor market
Though labor market conditions are more nuanced than the headlines suggest, employers still face a tight labor market. If you’re looking to hire, you already are consider the following strategies to secure top candidates.
- Pay people more: When employers are ready to hire, they’ll need to monitor the ever-evolving market trends in order to offer competitive salaries to candidates. This can also include cost of living adjustments and the ability to offer sign-on or annual bonuses.
- Search more broadly: In a tight labor market, employers may relax some requirements, such as a certain educational level or non-essential skills. Searching more broadly may also mean looking at different local markets, allowing people to work remotely or being willing to relocate people.
- Invest in employee training: A tight labor market also means investing more to train current employees and future hires. Providing on-the-job training and continued education options may help with employee retention.
- Invest in employee productivity: Finally, there’s another kind of investment that becomes more important in a tight labor market. If vacancies remain unfilled for longer than anticipated, you might rearrange teams or rethink individual roles. You might also invest in technology to help increase the productivity of existing employees or to fill vacancies where possible.
You might need these tight-market strategies in the future
The aging population, slowing birth rates and uncertain immigration mean that the working-age population is projected to grow much more slowly than in the past. The strategies that employers are using in today’s tight labor market might just come in handy in a future with fewer workers.
