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Record Unemployment, Labor Market Movement Highlights Outlook for 2018

[vc_row][vc_column][vc_column_text]The holidays are over, winter vacations are wrapped up, gym goals have already been pushed to next year and payroll numbers will be released shortly. All this means that it’s officially 2018. 2017 is still being heard though, thanks to record employment numbers. December set a record as the 86th consecutive month of positive job additions, the longest uninterrupted time of job growth since 1939 and underscores the health of the current job market.

Further bolstering 2017’s run for the record books, the unemployment rate decreased to 4.1%, the lowest level since 2000, something most people wouldn’t have been able to conceive of just seven years ago when the number held steady around 10%. The healthier employment numbers tend to be found in major cities and their surrounding suburbs, while more rural towns have been slower to recover due to a combination of factors, typically lead by a lack of job opportunities, especially in manufacturing and local business.

While employment numbers like we saw above are a strong sign of a healthy economy and, particularly for hiring managers, a reason to celebrate it also means that more employees are leaving their companies to test the waters and compare findings. Roughly 27% of all private sector employed persons changed jobs in 2017, a new record in the market.  Statistics showed that with the tight market and difficult to find advanced skillsets needed in today economy, those individuals that did switch jobs, saw the highest proportional increase in salary. Those who left saw average increases in compensation of just 4.9% (with healthcare and educational services seeing the highest increase at 6.2%) compared to the 4.3% of those who stayed at their company, according to ADP’s annual survey.

While nearly every measure of the current job market is positive, and business owners continue to voice their optimism that the trend won’t reverse any time soon, there are signs that not everything is perfect and certain areas still have a long way to go. When comparing wage growth to job growth, the resulting numbers left many business leaders with less than a warm and fuzzy feeling. Nationwide wage growth was unimpressive. The country as a whole saw wage growth stall at a paltry 2.5%, a full one percent lower than the Fed’s anticipated number of 3.5%.

Why unemployment continues to improve while wage earnings remained stagnant overall is a difficult question to answer. One reason often cited by CFO’s and CEO’s that participated in a recent interview session focused on hiring trends, is that the lack of skilled workers presents the biggest challenge to sustained economic growth as we move into 2018 and beyond. This worry is not relegated to employers exclusively, as candidates are also reporting concerns about being “left behind”, even though there are an estimated 6M job openings currently in the country.
Potential candidates and employers can both find hope by looking towards the future for clues as to what we should expect. It has become clear over the decades that while college is an important and formative time during a young person’s life, it does not help prepare them for the technical and professional challenges that will inevitably face them while on the job.

In conclusion: As we enter 2018, The Hiring Associates feels it’s prudent to look to the past to inform the future. Through our research and experience with both candidates and employers, we’ve been able to identify and track important trends and emerging patterns that cross a variety of industries, hiring needs, and company sizes. Learning the pain points and understanding the needs of all the major stake holders – the company CFO, the job seeker, team HR lead, etc. – is a crucial early step in the process that helps ensure not only the best possible fit candidate, but a team wide experience that specifically targets current employees and their opinions and makes sure that no one is “left behind”.[/vc_column_text][/vc_column][/vc_row]

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