- The tight labor market is forcing employers to be more creative in attracting top talent and puts job seekers firmly in the driver’s seat.
The October 2019 report of the Bureau of Labor Statistics (BLS) shows that unemployment remains at 3.6%. This marks the 20th month of unemployment being below 4%.
The state of California, in particular, has seen extremely low unemployment in the Bay Area and Orange County; and a moderately low rate in Los Angeles:
“The Bay Area continues to add jobs and growth much more quickly than the state as a whole and the nation,” said Robert Kleinhenz, an economist and executive director of research with Beacon Economics, which analyzed EDD reports with UC Riverside. “That strong growth is largely the result of contributions from the tech sector.” Tech companies added 1,800 positions in Santa Clara County and 400 in the East Bay in the month of September.
How is low unemployment affecting employers?
Longer Job Fill Times: Prior to unemployment going down to 4%, average job fill time in 2015 was 30 days. When unemployment started going below the 4% range in 2016, job fill time went up to 52 days. The average for job fill time in 2019 is at 42 days, however, with unemployment continuing to hover below 3% level, this could possibly go longer again. Some high-skill vacancies have longer time-to-fill ranges. Engineering positions, specifically, take the longest time with an average of 60-62 days.
Higher Wages: Wage growth took a sudden surge in 2019. Wage growth was hovering at 2.6% for a couple of years then up to 3.2% in April 2019.
“We’ve spent several years going, ‘Where is the wage growth? Where is the wage growth? And it turns out we just had to wait a few years for the labor market to get tighter’” said Martha Gimbel, an economist for Indeed.com.
For employers trying to entice top talent, especially those who are only passively looking, higher salaries might be the boost that will lead a candidate to make a career jump. In fact, when unemployment fell below 4% in 2017, it was reported that 68% of employers had to increase their salary offer to candidates.
To be competitive, employers are offering non-traditional benefits: Other than salaries, employers are offering non-traditional benefits to attract candidates. It was reported by BenefitFocus.com that 60 percent of employees are interested in a wider array of non-medical benefits, even if they have to cover some of the costs. Among the non-traditional benefits are flexible work hours, telecommuting or remote work, and health and wellness perks.
In the 2018 Society for Human Resource Management (SHRM) Employee Benefits Survey, employers who said offering more benefits help with company performance is up 58% versus 34% in 2017. Those who said offering benefits had improved their recruiting efforts are up 19% in 2018 versus 8% in 2017, and 28% reported it increased their effectiveness in retaining employees compared to 11% in 2017.
What does low unemployment mean for job seekers?
Paul Wolfe, Indeed’s Senior Vice President of Global Human Resources, said, “The job seeker is in the driver’s seat in today’s hiring market and should feel empowered to keep their options open while interviewing with potential new employers.”
According to Jobvite’s Labor Market report, 20% of job seekers who have higher education and are in the technology sphere said it’s much easier to find jobs in 2019. Ranking number one in reasons for workers to change jobs is career growth, especially for younger workers.
Candidates also take control when it comes to salary negotiation. 60% of job seekers now report being at least somewhat comfortable negotiating, up from 51% last year. 33% negotiated for higher salaries at their current or most recent jobs, and 34% managed to get 11-20% more from the original offer.
Job seekers can now afford to be choosy in finding the company culture that best suits them. 37% of those surveyed said that culture is important in their job search and 28% cite that they quit within the first 90 days at a new job due to unsuitable company culture.
Not surprisingly, a recent Indeed.com report said a vast majority of employers have experienced candidates disappearing off-the-grid during the interview process, or more commonly known as “ghosting”. 83% of employers have reported being ghosted within the last couple of years. Job seekers who participated in the report said their top reason for ghosting employers is because the hiring process was too slow or too long, or they had received a better offer elsewhere.
Ghosting doesn’t just occur during interviews. 19% of job seekers said they ghosted after accepting a verbal job offer while 22% said they accepted an offer but ghosted on the first day of work. This says a lot about workers’ confidence in their ability to land another opportunity if a position does not pan out initially.
It will be interesting to see how long this tight market can sustain itself. Labor Force participation is projected to grow modestly by 0.5% annually within the next decade.
Hiring will continue to be a competitive and arduous process. Working with an experienced and reputable staffing firm can help increase the likelihood of success. Sourcing, screening and pre-offer activities can all be handled and accelerated by staffing professionals. This will be an advantage in capturing top candidates.
For job seekers who are inundated with opportunities, working with a staffing firm can help give you insights on potential employers’ businesses, products, culture, and day-to-day operations. This should help narrow down job options to those that best suit your career objectives.
SoloPoint Solutions partners with companies and engineering professionals to find the right fit for each other. To learn more about our services, contact us today at (408)246-5945 or (714)708-3639!