Whenever we hear about record low unemployment, the initial reaction is usually to celebrate. However, record low unemployment raises all kinds of issues for employers.
Employers not only have to fight to land in-demand candidates, they also have to fight to keep the talent they already have from getting lured elsewhere. Consider the following results of record-low unemployment for employers.
According to an October 2018 report from the Bureau of Labor Statistics, the job market is getting tighter. The number of resignations, or voluntary separations, has been increasing year-over-year.
This rising tide of resignations indicates that people are not just leaving their jobs for better opportunities, but employers must count on filling even more roles. Furthermore, job openings are appearing more rapidly than people are getting into the workforce or quitting their jobs.
All of this produces competition in the labor market, albeit a much different type of competition from that of recent years. As opposed to many applicants vying for a few jobs, there is now a surplus of job openings and an inadequate number of applicants to fill them. This gives applicants many more options. It’s also worth noting the rising amount of resignations points to a rising degree of power and choice for job seekers.
Another report released by the BLS spotlighted differences in wages. The agency said wages have risen by 1.5 percent for the last five years. As the labor market stays tight, employers will be pressured to increase pay rates to vie for talent.
The ramifications for this are easy to see and take on new significance when put next to the hires and resignation statistics. Basically, wages are remaining fairly flat and there are more openings than applicants to fill them. This creates pressure for talent acquisition departments to act and calls for a more intense hiring strategy.
More Intense Candidate Marketing
In a tight market, businesses can either decide to contend based on cost or differentiation. In a labor market, competing through cost means offering higher wages, better benefits and more fringe benefits. With differentiation, businesses must define a unique, valuable employer brand. This approach can include offerings like high pay but should also include intangible benefits like a better work culture or work-life balance.
Implications for Job Seekers
For job seekers, a tight labor market means more attractive job offers and more differentiation. Each employer should be trying to make a unique pitch to job seekers and those looking for work can take advantage of the situation by digging in on each company’s unique value proposition with the goal of finding the ideal job situation.
Job seekers should also look at look at the ‘careers’ page on employer websites and to see if it speaks to what they would like to see in an employer brand.
In this labor market, employers must act swiftly to distinguish themselves, or else their competition will beat them to it and job seekers are the ones that benefit.
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