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Positive reports about the job market come with caveats.
The labor market often mirrors the U.S. economy as a whole: Every good report comes with a caveat.
We are in the midst of a stretch of job growth not seen since the 1930s—yet millions of people remain out of work. Corporations are enjoying record profits, but they generally aren’t raising wages and many Americans are struggling to get ahead. The unemployment rate has declined significantly, but—and here’s the caveat again—critics contend it is largely because millions of job seekers have stopped looking for work and therefore aren’t included in federal unemployment surveys.
Still, hiring is up and there are no signs it is slowing. December marked the ninth straight month that the hiring rate rose in manufacturing compared with a year ago, according to the Society for Human Resource Management’s (SHRM’s)
Leading Indicators of National Employment (LINE) report. December also marked the seventh time in eight months that the hiring rate rose in the service sector.
At the same time, these employers are struggling to fill certain vacancies. In November, manufacturers reported the highest level of recruiting difficulty since May 2006. In the service sector, recruiting difficulty reached its highest level since October 2005, according to LINE.
Despite strong hiring activity, organizations report that they are having difficulty hiring full-time regular employees. Here are the top reasons why and the percentage of organizations that cited each reason.
Economic Conditions Survey Series reveals that 50 percent of employers had difficulty recruiting in the past year. And while many of them cited candidates’ lack of experience or insufficient skill sets, employers also seem to still be keeping a tight grip—perhaps too tight—on compensation.
Another 50 percent of HR professionals from that survey reported that they were hindered by “competition from other employers,” which could mean that the office across the street has deeper pockets. Here’s another telling statistic: 37 percent of HR professionals said they couldn’t fill jobs because qualified candidates rejected the compensation package.
So as we move ahead to 2015, perhaps any further acceleration in hiring will come down to who blinks first—the employer who might have to shell out a few extra dollars to find the person needed for the job, or the job seeker who obtains new skills or perhaps accepts lower pay in order to get back to work.
Overall, though, several organizations issued fairly bullish predictions on hiring for 2015:
After a few years focused mainly on retention, HR should head into 2015 ready to recruit—caveats or not.
Joseph Coombs is a senior analyst for workforce trends at SHRM.
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