Something unique is happening in the job market and no one is paying a bit of attention. While most of us were squeezing in one more summer vacation or doing back to school shopping, employees left their jobs in what appears to be record numbers! Allow me to explain.
The US economy is into to its sixth year of job recovery. Relative to the labor market there has been a slow but steady environment of job creation with an average of 211,000 jobs created per month in 2015 while the unemployment rate has dropped .4 percentage points during that time. In August, while a little below average, 173,000 jobs were created, prompting unemployment to drop from 5.3% to 5.1%. All of this has happened right in front of us, with very little impact on the mindsets of employees and hiring managers.
A lack of awareness of the recent turnover makes sense on a base level. We have had very little, if any, wage pressures or inflation. There has been no real pain for employers. Sure, we hear the market talking about some skills sets that are in short supply. That STEM jobs never really felt the recession. But, job postings that used to produce a slate of candidates, well, no longer produce quality candidates. In fact, in July the US set an all time record going back to the year 2000 for the number of jobs posted. Yet hiring was about the same, yet consistent number? Why?
What is the shift? Voluntary Turnover. Every Monday morning we are getting calls and messages pointing out the obvious. Employees are leaving for greener pastures. And, more than likely, they were not even looking for work. They either got a call from a friend, someone sent them a job posting, or perhaps they got a call from a recruiter. At 5.1% there are fewer being laid off, fewer who are unemployed. There are simply less active job seekers available now than there have been since 2007 (pre-recession). And the pressures of this environment are now starting to show during planning sessions with talent acquisition professionals. For most, business is good, earnings are up. Revenues hanging in there. Now we have talent gaps, shortages and resignations? What next?
But Burkhard, where is your hard data? This is just conjecture and first-hand marketplace experience. Trust me, we are looking for others that are studying this. And we are working on plans to launch our own survey very soon. But here is my proof.
The Conference Board just updated Jobs Survey Results — a survey they have done for 20+ years. September is the first time since late 2007 that the proportion of respondents “who are finding jobs plentiful equals that for those who are finding jobs hard to get. The last two times the ‘plentifuls’ first exceeded the ‘hard-to-gets’ after an economic slowdown were 1996 and 2005.” In both of those period jobs, unemployment, and frankly a good economy followed. (Source: Bloomberg, Wells Fargo Investment Institute)
So mark my words: what we see is real. If the economy holds up we are entering a new era in employment. Get ready for turnover. Be prepared for job postings to produce less. Get conditioned to recruitment and talent being critical business issues that hold back your business. Employees have had choices. They and their employers simply did not know it. Demand is so strong that the jobs are coming to them!
I am not sure business is prepared for what’s to come. Expect Monday morning surprises “Hey boss, do you have a minute?” Your talent strategy will stop producing they way it did. Your turnover could and should spike, regardless of your focus on talent, culture and employee engagement. Whatever your talent weakness has been, it will be exploited!
Got data? Lets talk! We have many, many relationships that are seeing this ‘plentiful vs. hard to get’ trend.