This past Friday, the Commerce Department reported the second quarter Gross Domestic Product, GDP. As anticipated economic activity was robust, increasing by 4.1%. This compares favorably to an adjusted 2.2% increase for the first quarter. The principal drivers of this growth were consumer expenditures up 4.0%, business investment up 7.3%, exports up 9.3%, and federal expenditures up 3.5%. This is the strongest activity we’ve seen in about four years. Hiring for factory jobs is reported to be brisk. Concurrently, the unemployment rate is 4.0%.The economy is awesome! Companies that haven’t considered expanding for a while, are investing in their businesses. Expansion requires them to hire more employees. However, the economy is at full employment. With respect to the labor market, it is no longer a buyers market. Now, it’s a seller’s market. Finding the ideal candidate is becoming more difficult. In fact, the tight labor market in the restaurant and foodservice industry has increased the demand for automated equipment.
The improved economy and the increased demand for labor is forcing employers to develop competitive employment offerings. When hiring full-time equivalents employers have three options: recruit those currently employed in a similar job, looking for a better situation; hire people who don’t have the full set of skills necessary to do the job but can succeed with training and development; or take a risk by hiring from the pool of partially or long-term unemployed. Of course, another option is to find temporary workers or freelancers who are ready to go to work for a single employer.
An employer trying to recruit from the pool of the gainfully employed should understand why employees leave their jobs. They will leave their job if they feel unappreciated and under-utilized. They may be motivated to leave their current situation if it does not provide opportunities for professional development or advancement. Employers seeking to attract candidates currently employed must give these issues careful consideration as they craft their job specifications. To compete in a full employment environment, employers must offer a compelling alternative to compensate for the risk and uncertainty of leaving one’s job. Those employed understand that the market is volatile, given mergers and acquisitions, re-organizations, and the effect of systems and automation that reduces the need for some jobs.
Employers with budget constraints who cannot offer a competitive salary may consider hiring someone with the potential to grow into the requirements of the job. This is a viable strategy, however, it requires a commitment to training and development for the recruit. This is similar to a Promote From Within Strategy, although these employers will likely focus on hiring entry-level employees. Employers will not be successful with this strategy if they don’t invest in training programs.
Considering applicants with a lot of job changes, or those who have a been sidelined for significant periods of time should be your last consideration. There may be people in that pool who have faced circumstances beyond their control, not reflective of their work ethic or job skills. To identify viable candidates from this pool requires extra time and effort. In this case, the use of diagnostics is warranted.
Other alternatives to hiring full-time equivalents, either for short-term or long-term situations, are temporary workers or freelancers. These people choose not to work for one employer exclusively due to lifestyle considerations or personal issues. Their hourly rate may be higher than that of a full-time equivalent, but they don’t require benefits, and the additional cost might be worth the flexibility available to the employer.
From what I’ve observed, many employers are lagging in their ability to adapt to the current labor market. Whereas they became creative during the last administration, finding solutions around the regulations created by Obamacare, such as job sharing between employers, many employers have been slow to respond to the challenges resulting from the current economy. If they are serious about expanding their businesses, they will eventually adapt and become competitive recruiters. To do so requires that employers understand the nature of the market, then consider all options to arrive at the most effective recruiting and selection strategy.
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