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Amid uncertainty about future job growth, key talent remains hard to find.
Few are better positioned than HR professionals to assess the current economy and give us a sense of where we’re headed. According to results from the latest annual Society for Human Resource Management (SHRM) Jobs Outlook Survey, which polled public- and private-sector human resource practitioners, the outlook is mostly positive. While their confidence in the job market has fallen compared to a year ago, most respondents said their organizations’ finances are in good shape and few expect job cuts as 2016 comes to a close.
Job growth over the first half of 2016 was fairly strong, with 43 percent of HR professionals surveyed by SHRM saying that their companies added jobs during that period. Another 41 percent maintained staffing levels, and 16 percent reduced head count. The main reasons organizations held off on hiring were because business was not expanding; because improved efficiencies reduced the need for staff (through technology, automation or other business process improvements); and due to economic volatility/uncertainty.
Despite that unpredictability, activity in the labor market throughout the second half of 2016 will likely hold steady. Nearly 40 percent of respondents expect their companies to hire new workers during this period, and less than 10 percent anticipate a reduction in head count. Meanwhile, 58 percent had some level of confidence in the U.S. job market for the second half of 2016, including 13 percent who were “very optimistic” about job growth. (HR professionals in government were the most confident in the strength of the job market; those in publicly owned, for-profit organizations had the least faith.)
Optimism about job growth declined slightly compared with the second half of 2015 (when it stood at 69 percent), but there continues to be momentum in hiring. That could reflect a renewed war for talent. And it may explain why many in HR are also forecasting a rise in compensation rates for a number of jobs. Just over half of survey respondents in government said compensation would increase for salaried individual contributors/professionals, a job category that includes analysts, nurses, engineers and other high-skill positions.
HR professionals at most organizations (89 percent) reported that the level of variable pay (bonuses, commissions, awards, etc.) would be maintained or raised during the second half of 2016. However, fewer employers expected to increase overtime hours in the second half of 2016 compared with the first half (18 percent versus 28 percent).
In the wake of uncertainty, businesses continue to operate in an environment where it’s hard to find individuals to fill many key roles. That’s not likely to change in 2017, and those in HR will have to use their knowledge of what is happening in the labor market as the foundation for building strategies to find, attract and retain the best talent.
[SHRM members-only resource: Discuss this article on SHRM Connect]
Jen Schramm is manager of the Workforce Trends program at SHRM.
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