“Double Shot” of Low Unemployment and Rising Wages Tests Workforce Plans
Unemployment remains low and the rate is about as stable as it can be for this often-volatile metric. A byproduct of broad employment, wages tend to rise as competition for finite labor capacity drives pay rates higher. This double shot of good news for workers spells challenge for employers and their workforce management plans. Here’s the latest data followed by some recommendations for hiring organizations seeking to mitigate these challenges.
On September 7, the Economic News Release from the United States Labor Department’s Bureau of Labor Statistics revealed the sustaining strength of the labor picture in America. The release noted, “Total nonfarm payroll employment increased by 201,000 in August, in line with the average monthly gain of 196,000 over the prior 12 months. Over the month, employment increased in professional and business services, health care, wholesale trade, transportation and warehousing, and mining.”
Not surprising many contingent workforce planners, professionals, business services and healthcare workers remain in high demand. Professional roles added 53,000 jobs in August and 519,000 so far in 2018. August health care employment rose by 33,000, with job gains in ambulatory health care services and hospitals. Health care has added 301,000 jobs over the year.
Always a bellwether for leading economic indicators, transportation and warehousing employment rose by 20,000 in August and by 173,000 over the past 12 months as goods manufacturers anticipate continued strength in consumer confidence and near full employment ensures increased economic activity. Those same manufacturers also added more than 22,000 new jobs to increase output matching demand with (typically high ticket) durable goods manufacture accounting for about two-thirds of the over-the-year job gain in wholesale trade.
Regarding wages, average hourly and weekly earnings of all employees on private nonfarm payrolls by industry sector and seasonally adjusted are up from $907.82 in August 2017 to $937.02 in August of this year. Pay rates in the highly competitive skill sets show even more significant upward velocity reflecting the scarcity of candidates in these fields.
So what can a hiring organization do to mitigate the effects of this “double shot” of low unemployment and rising wage pressures? One proven strategy that delivers more consistent access to qualified talent focuses on becoming a preferred partner with your staffing suppliers. We wrote a great post on just how to accomplish that goal titled, Four Ways to Become an “A+” Customer to Your Suppliers.
When it comes to sourcing and retaining contingent talent in an environment that prompts workers to leave their existing positions for greener pastures elsewhere, we produced a three part series titled, Retaining Contingent Talent in an Employees’ Market. Read Part 1, Part 2 and Part 3 for detailed strategies.
For specific strategies tailored to your unique business requirements, reach out to the experts at nextSource who have experience in navigating these conditions during other times of historically low unemployment and resultant demand.