US Jobless Claims at a 41.5-Year Low! What does that mean for you and your company?
The number of jobless claims in the US fell to the lowest rate since late 1973 (http://yhoo.it/1JADuRQ). This may come as a surprise to many reading this for the first time, especially if they are accustomed to closely following the media. If one listens to the 24-hour news media cycle, it is likely that they hear a negative reference to the economy or to the jobs situation at a minimum of once every day, if not more often. Why is this? My best conclusion is that hype sells far more than facts do. The fact of the matter is that the employment economy is booming – particularly for skilled labor.
The problem with the fostering of a continued perception of a “tough” jobs situation is that it gives companies false expectations when it comes to hiring. The reality, however, is far different. The fact of the matter is that most people who are good at what they do are either working, or have several job options from which to chose, and are about to work. (Looking at the numbers a different way, we are talking about MORE than 19 out of every 20 people!) This is, of course, not a universal truth, but the reality is that things are vastly different than they were in 2009 or 2010 on the hiring front – just like they are on the economy front.
Despite the fact that things have radically changed in the marketplace, a large number of the companies with which I engage with have not changed their hiring practices or attitudes in years. They often use the same procedures, take the same amount of time to complete the process, haven’t adjusted salaries or recruiting fees, and otherwise have decided that they really would like to behave exactly like they did when it was a candidate-rich client-centered jobs market. In other words, “Wasn’t life great when I held all of the cards?” Well, yes it was. The key word here is “was.”
I have heard that the definition of insanity is “doing the same thing over and over again and hoping for a different outcome.” I would argue that one logical corollary to this would be “doing the same thing over and over again when things have changed and looking for the same outcome.” It was very convenient for companies when the job market favored the client, and it is very comfortable to continue to pretend that this is still the case. The problem is that it is decidedly not the case. Things have changed. Successful companies change with the times, or they are overtaken by those who do! (Hello Kodak, Nokia, Xerox…) The ‘jobless rate’ is a conglomeraton. Keep in mind that it includes every coal miner, engineer, administrative assistant, and fast-food worker who is looking for work. When you parse out the numbers for skilled technical labor, the reality is far more grim for employers who haven’t updated their hiring attitudes.
Executives who want to be successful need to be proactive if they want their company to thrive. It is almost tautological. In this case, being proactive means closely examining internal equities, market salaries, benefits, hiring practices, fees for recruiting and recruiting agencies, and employer branding, and updating their approach. A failure to focus on these areas will result in a leakage of talent that will be difficult (and very costly) to reverse – far more expensive when addressed reactively rather than proactively. This is already happening in quite a few companies: I hear from companies every day who are looking to replace someone who left because they were drastically underpaid and overworked, hadn’t been given a substantial raise in over 6 years, and felt like they were taken for granted. Ironically, many companies best solution is to ask me to find someone with the exact same skills as the person who left, for the same pay (or a bit less, as they are not yet proven entities,) to work the same number of hours (or a bit more, as they will be new.) Um…. I don’t know about you, but this does not seem like a particularly well-thought-out recipe for success to me…
Times have changed. The economy has changed. Gone are the days of the $5 foot-long premium Subway sandwich. The job market has tangibly changed: salaries and costs have changed dramatically – just like premium subway sandwiches. Today’s jobless announcement shows that candidate availability has drastically changed as well. It has just happened so slowly that it hasn’t prompted action or immediate attention. (I guarantee that if the unemployment rate had gone from 2009 levels to current levels in three months, it would be the number one issue being addressed by most companies!) In other words, slow change is the most insidious. Ignoring these tangible differences and trying to do things exactly the same as five years ago is not a recipe for maximizing success.
I am not saying that companies should be profligate in their spending, hire with reckless abandon, or make any job all about the salary. I am saying, however, that if people truly are a company’s greatest asset (as I hear over and over,) a careful examination to ensure that the hiring policies and processes, as well as the salaries and associated fees, have grown to keep up with the market is basic good “Management 101.”
In other words, the jobless rate has fallen to a 41.5 year low – what have you, or your company done about it?