In the past year, the U.S. unemployment rate went from 5.0 percent to 4.6 percent—and the U.S. Department of Labor reported that the number of employed individuals rose by nearly 60 thousand. Whenever we read news like this, we rejoice at the economic recovery the U.S. has made since the recession that erased nearly 9 million American jobs less than a decade ago. But as employers, we need to read between the lines of this data and understand what it means for our hiring practices.
Turnover is On the Rise
According to the Bureau of Labor Statistics, the job market is tightening. The number of quits, or voluntary separations, is rising year-over-year. This increasing quit-rate level tells us that not only are employees leaving their existing jobs for better opportunities, but that as an employer, you must anticipate filling even more roles–some preemptively. In addition, the graphic below shows us that altogether, job openings are occurring even faster than people entering the workforce or quitting current jobs.
This creates competition in the market, but a much different one from recent years. Rather than multiple candidates vying for positions because of limited availability, we now have a surplus of positions opening up and not enough candidates to fill them. This gives candidates much more flexibility in their job selection. It’s also worth noting that the rising number of quits indicates a rising level of power and choice on the side of the candidate.
Compensation is Steadily Increasing
Another data set released by Bureau of Labor Statistics highlights differences in average real wages. In the past year, wages have increased by 1.5 percent for the last five years. As the labor market continues to tighten, companies are likely to feel more pressure to increase wages to compete for best talent.
The implications for this are straightforward and take on new meaning when held next to the hires and separations data. In essence, wages are remaining relatively static and there are more openings than candidates to fill them. This creates an imperative for talent acquisition professionals to act and requires a corresponding hiring strategy.
With this power shift in the job market, it is imperative that organizations recognize the change and react in order to remain competitive. Ask yourself, “Why would a candidate want to work for me?” If your answer relies mostly on compensation or benefits, ask yourself again, “Are these offerings drastically different from those of my competitors?” Chances are, they’re relatively similar. This means that you need to find new, creative ways to appeal to your candidates in order to differentiate yourself. Find out how to attract talent using your employer brand here!
How to Retain Talent in a Competitive Job Market
Here are a few ways you can retain your current employees and attract the best talent for your organization:
- Identify what makes you different from other employers, especially your competitors.
- Talk to your employees. Look at exit interviews as well as onboarding feedback to find out what is keeping employees at your company and what’s driving them away. See how you can improve and what you should emphasize to candidates.
- Take a look at your current career site. Make sure it speaks to your brand and the types of employees you are searching for.
- Act quickly and differentiate your company, or your competition will beat you to it!
It’s clear that it’s getting harder to find qualified employees in the current market, but that doesn’t mean you should lower your standards. Instead, you should think of new ways to win the war for great talent. That means it might be time to re-evaluate how you hire, the ETS team is here to help! Set up a meeting today with our team for powerful data-driven staffing solutions.