The Job Market Is Going Wild, and It’s Getting Worse. How Do You Recruit?
Posted on February 07, 2022
The labor market has gone a bit crazy, and there seems no end in sight. More than 160 million people are working in the U.S., and almost 16 million jobs are open. This equates to roughly one in 10 seats in your office being empty, and you’re competing with everyone else for a limited pool of candidates.
Adding to this feeding frenzy, job openings are on the rise. In November and December, over 450,000 new jobs were created in the middle of the holidays, and according to the Department of Labor, the unemployment rate is now down to 3.9% and falling. As the current administration plans on pouring additional money into the economy, it is forecasted that this trend will continue. According to the Bureau of Labor Statistics (BLS) website, “Total employment in the U.S. economy is projected to grow by 15.6 million during the 2012–2022 decade to reach 161 million; this represents a 10.8-percent employment increase. Some of the fastest projected growth will occur in the healthcare, healthcare support, construction, and personal care fields. Together, these four occupational groups are expected to account for about one-third—more than 5.3 million—of all new jobs during this period.”
Wages are on the rise as well. The BLS research shows that average wages are rising at over 4.2%, the highest growth on record. Lower-paid workers have seen the most significant gains, with pay rising for employees at restaurants, bars, and hotels by 8.1% in the third quarter from a year earlier. For retail workers, it’s jumped 5.9%. This means job seekers are looking for more money, they feel more empowered than ever, and they’re looking around.
Shockingly, the number of people who voluntarily leave positions was over 38 million in 2021, the highest in history. It is anticipated that this trend will continue in 2022, with economists estimating that, given the number of job openings, almost a third of Americans will voluntarily change jobs this year. According to McKinsey’s research, two-thirds of these job seekers do not have a new position set up to go to, so people are feeling very optimistic about their chances of finding a new job quickly.
So think about the numbers. One in ten (16 million) jobs open, over 4 million people leaving their jobs each month, and wages increasing at the highest rate ever. This is a wild job market.
Companies find hiring extremely difficult, and recruiters are in high demand. We need to think about recruiters as the most valued workers you have!
So what should companies do in the LBM industry?
So let’s start by observing that three things are going on at once.
- The job market itself is on fire. There are so many jobs open that almost every position feels like it’s tough to fill. Many H.R. managers tell us they’re posting jobs and seeing no qualified candidates at all.
- The nature of work is changing. With so many jobs disrupted by the pandemic and digital transformation, we must search for skills and culture fit, not just experience. Many new positions being created don’t have large pipelines of experienced candidates.
- The mentality of job seekers has changed. Candidates feel burned out, empowered, and ready to negotiate.
Six Steps to Sanity in Hiring:
- Focus On Employment Brand, Culture, and Leadership
The most significant factor in recruiting great people is creating an Irresistible Company. In other words, if your organization is not known for its good deeds, fair pay and work practices, and a solid commitment to customers and the community, you’ll have a hard time finding people. Hancock Lumber in Maine has been named “Best Place to Work in Maine” for the 8th year in a row. An accident, not at all. Kevin Hancock works on his culture, brand, and leadership daily; it’s in his company’s DNA to be a great place to work. People don’t just look for a job – they look for a company. So if your company is unknown or poorly respected, they’ll look elsewhere; that’s a fact. Culture and reputation are more important than pay for most job seekers. They want to be appreciated and know they are cared for.
- Identifying Culture and Skills Fit
In a more normal labor market, you would typically look for someone who has done this job before. In other words, you look for specific job experience, validate the candidate’s success in prior roles, and call their references for feedback.
Today, as jobs change faster than ever, it’s ever more likely you will hire someone who has some of the experience you need but is more likely to be hired based on skill, not experience. So this means you’re hiring for culture, intelligence, ambition, and potential.
And this means recruiters are more important than ever. Our experience shows that best-in-class companies work with recruiters who can assess fit, culture, growth mindset, skills, job fit, and experience. We find that those top companies focus on “Human-Focus Recruiting” is more important than ever. We are not saying that experience is not essential, but you may have to live with less experience and rely on skills and ability to grow in this job market.
- Don’t Chase Pay
You must pay what the market demands, and for many jobs, particularly hourly and highly regulated roles. This means you may have to raise hourly wages, add more benefits, or even pay a bonus to get someone to join. But be careful; this is a dangerous strategy to follow.
Remember that the most expensive person you hire is someone who doesn’t work out. If you “chase pay” to get someone to join your company, you risk alienating existing employees and possibly hiring someone who feels so empowered they don’t perform to your hopes.
It’s a candidate’s market still, and they know it. We are trying to recruit a professional for a particular role right now and one of the candidates disclosed during the interview that she was making $140,000 in her current position. Because she has been “Pay Chased” by several companies, she told us she wouldn’t accept a job for less than $200,000 per year.
- Don’t Set Your Company Up for a Problem Down the Road
We are at the very peak of a 14-year economic cycle, the most extended upswing in our country’s history. Sometime in the next year or so, the economy (and stock market) will slow down. If you hire like crazy and overpay people for the next year, you’ll find yourself with a lot of challenges ahead. And let’s remember this, even though you may be in a hiring frenzy, bringing in too many people can backfire. Each new employee creates a burden for onboarding and may change the team’s culture.
- Lean on Recruiters, Not just Technology or Website Want Ads
No one will give a recruiter all their hiring needs; it’s too expensive. Align your company with a trusted recruiting firm. As mentioned earlier, recruiters are still the key to great hiring. “But what about all this recruiting technology and online sites who promise a needle in the haystack”? While it may sound promising, indeed it may, but it’s a lot like self-driving cars. The tech may help you stay out of trouble, but you still have to take the wheel and focus on your destination goals
There is a new era of Human-Focus Recruiting – empowering the best recruiters to focus on hiring the best of the best people. In short, Great Recruiters help you Hire Great People.
Great recruiters are good at many things: they know your company’s culture, they work closely with hiring managers to understand your jobs, and they have a deep knowledge of the market. Not only do they know a lot of people, but they can search people out, assess their readiness and fit, and convince them that your company matters. They focus on the candidate’s best interests concerning their professional and personal lives.
- Take Care Of Your Existing Employees
Let’s wrap up with this in mind. If almost a third of the workforce is going to change jobs this year, you don’t want them to be the workers in your company. If the analysts are going to be correct, there have to be some companies losing a lot of people every month. That doesn’t have to be yours.
Now is the time to focus on employee engagement which is all about treating people well. Spend some time getting to know the people you have, building a culture of internal mobility, and taking care of your leaders. It’s the most important recruiting strategy you have, and when people hear about it, they want to be a part of it. Every top player wants to play on a great team. We all have seen an All-Star playing on a team that loses; they are the first to ask for a trade to a winner. Commonsense. Remember this: recruiting is the most important thing we do. If we don’t bring the right people into the company, no amount of management can fix the problems.
It’s a crazy job market out there. Now is a time to build your employment brand, focus on your culture, get back to basics and recruit for potential, fit, and growth.