From the CEO: Three Signs of Economic Recovery

The latest job figures provide a roadmap for HR.

By Henry G. Jackson Mar 1, 2015
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If you’re a news buff like me, you know that the U.S. economy is a topic of daily discussion among politicians, pundits and economists. Since the start of the Great Recession, people have been looking for clear signs of economic recovery. Good news may be here at last.

But for the HR profession, the latest job figures are more than just data; they are insights into how to do our jobs and drive results for our organizations. As Joseph Coombs, the Society for Human Resource Management’s (SHRM’s) senior analyst for workforce trends, recently put it, “HR professionals have a unique perspective on employment trends—they recruit, they hire and fire, they measure workers’ engagement with their jobs, and perform other tasks that are connected to the health of the labor force.”

Here are three signs pointing to economic recovery that every HR business leader should know:

1. Unemployment is down. As I write this, the U.S. unemployment rate is 5.7 percent, near its lowest level since 2008. An in-depth look at the numbers reveals remaining challenges such as underemployment and the loss of middle-skilled jobs, but total unemployment is still trending downward. More people found work in 2014 than in any of the past 15 years.

2. Job creation is strong. There are now nearly 5 million job openings, the most since 2001. HR was feeling optimistic about job growth, with nearly two out of three respondents to SHRM’s latest Jobs Outlook Survey expressing confidence in the U.S. labor market and anticipating hiring.

3. In many industries, more people are quitting. Over the past year, we saw a slight uptick in the number of people who quit their jobs. While having a large quit rate is generally bad for our business, it’s good news for the overall economy because it serves as a gauge of workers’ confidence to leave their jobs for other opportunities.

Despite these promising signs, there is still an important element missing: rising wages. Employees are clearly ready for a raise, but wages have not kept pace with other employment gains. In 2010, compensation/pay was the fifth most important factor for job satisfaction according to SHRM’s annual Employee Job Satisfaction and Engagement Survey, and now it tops the list. Moreover, a new Glassdoor survey reveals that more than 1 in 3 workers will look for new jobs in 2015 if they do not see a rise in pay.

All of this adds up to the new talent economy. After years of budget-cutting, layoffs and workers doing more with less, employees are now in the driver’s seat. HR will need to return aggressively to the people management practices that put our organizations ahead—recruiting new talent, retaining our best employees, investing in our workforces and more. SHRM’s competency model, diagnostic tools and certification can help you develop in these areas. You’ll also find expert advice right here in HR Magazine.

HR must know the signs of economic recovery and adjust our people strategies accordingly. We helped our employers survive a historic economic downturn. Now we must help them thrive.

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