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What’s the lowdown?
According to the U.S. Labor Department, the unemployment rate has fallen to 4.3 percent, its lowest point since 2001. Some analysts believe the 138,000 U.S. jobs added in May will even be enough to encourage the Federal Reserve to raise interest rates later in June. But it’s not all good news. The rate of job growth has actually been slowing down in recent months – and that could mean trouble for both employers and job seekers.
Why the slowdown?
The economy has been steadily recovering from the Great Recession. At the current hiring pace, unemployment could soon drop to a level that some analysts would claim indicates a healthy economy. Others believe this slowdown is necessary to maintain balance. Either way, the job market waters are murky. Many people that were considered unemployed were not necessarily hired but had actually stopped looking for work in recent weeks. While this had a positive impact on the unemployment rate, the fact remains that fewer new job opportunities are being posted.
Fewer new jobs are going up yet job openings are still at an all-time high, meaning companies are not actually filling as many positions. With more job applicants already on the clock, employers have less hiring options to place the skilled workers they need. Traditionally, that is good news for applicants because employers tend to raise pay in order to attract the best candidates. Advantage, job seekers.
However, employers are taking a pass on raising wages (for now), mainly because they don’t yet have to. With the previous large pool of job seekers, they were able to keep wages low and still find the skilled people they needed. But now executives are tapping their fingers over the fact that employee productivity has fallen by 0.6 percent over the first quarter of 2017. Until productivity ramps up, employers are taking a pass on pay raises. Advantage, employers.
Here’s how it’s going to go down
Economists have suggested that this hiring lag will lead to higher wages in the next year or so after the new hires get past the learning curve and start increasing productivity. But that means employers have to place the right skilled employee now and employees have to find the right position that fits their work style.
Now more than ever, employers are seeking better candidates through talent development consultants and employees are seeking organizations where they can have longevity. Workstyle and ability assessment tools help both sides match skills and personality traits to the requirements of the job. They go beyond simple resume keywords to bridge the gap between education, employers and career readiness. It is a simple solution that quite often pays for itself through lower turnover, reduced HR spending and greater productivity.
A better bottom line for employers, greater pay and job satisfaction for employees. Advantage, everyone.