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HR will be called upon for creative retention strategies
It may be of little consolation to those who remain out of work, but more people are viewing the U.S. labor market in a positive light. Consider, for example, the plight of “discouraged workers,” who are defined by the federal government as people not looking for work because they believe no jobs are available for them.
There were 740,000 such individuals in December 2014, down by 177,000 from a year earlier and a sharp decline from 1.1 million in December 2012, according to the U.S. Bureau of Labor Statistics (BLS). And even though the labor force participation rate remains lower than historical levels, opportunities for work are increasing: 2014 was the nation’s best year for job creation since 1999.
Recent reports show that job holders themselves—many of whom probably avoided career changes during an uncertain post-recession recovery—are gaining confidence in the ability to find something new in 2015.
In the fourth quarter of 2014, more than 1 in 3 workers (35 percent) said they would look for a new job in 2015 if they didn’t receive a pay raise this year, according to a recent survey from California-based employment services company Glassdoor. Nearly half (48 percent) of employees surveyed reported optimism in their ability to find a new job within six months, the highest level in six years.
Also of note: 43 percent of unemployed job seekers reported confidence in finding a new job, a six-year high. A separate survey by another employment services company, CareerBuilder, showed that 30 percent of workers said they regularly search for new jobs even though they’re currently employed.
“There is always a flurry of activity in the beginning of the year,” said Corinne Jones, president and senior HR consultant at CJC Human Resource Services, a New York City-based consultancy. “Employees typically have just received their evaluation—and raise or bonus—and those that aren’t content start looking. Even those that are content want to ensure their value and may dip a toe into the market to find out what that value is.”
The economy’s increasing stability is also providing employers with the comfort they need to begin “adding layers into their organizational hierarchy,” said Jones, who noted that she is seeing more managerial opportunities now “than any time in the last 10 years.”
Data from the Society for Human Resource Management (SHRM) show more evidence lately that the market is tilting toward the job seeker. Although many companies are still keeping pay rates flat for new workers, 15.8 percent of manufacturers and 16.7 percent of service-sector companies said they increased new-hire compensation in January, according to SHRM’s Leading Indicators of National Employment (LINE) report. Those totals represented four-year highs in January for both sectors. It also marked the seventh straight month that a four-year high for new-hire compensation was reached in manufacturing; it was the second straight month for the service sector.
Employers may be opening their wallets a little wider in response to their struggle to find properly skilled candidates: January marked the 11th straight month that recruiting difficulty increased from the previous year for manufacturing and service-sector HR professionals, according to LINE. It was also the ninth straight month that recruiting difficulty reached four-year highs in both sectors.
This poses significant challenges for HR professionals, and Jones said many of them are employing new tactics for staffing management.
“Retention strategies are far more creative now than ever,” she said. “Health benefits have expanded to areas such as onsite yoga classes and massage therapy, and wellness programs are booming. We have also been involved in a fair amount of projects surrounding the optimization of workspaces for workflows, and employees who telecommute as part of a flexible work schedule offering.”
Jones may have a point: The CareerBuilder survey revealed that many workers might stick with their current gigs if they had a few more perks. Those surveyed indicated that half-day Fridays (40 percent), an onsite fitness center (22 percent) and the ability to wear jeans to work (15 percent) would make their workplace more satisfying.
“Candidates are very interested—perhaps more so than in compensation—in the company culture and these types of unique fringe benefits,” Jones said. “We saw the shift happen in 2014. Retention has become a much bigger game than compensation alone.”
And so, after years of sluggish, post-recession labor market growth that gave employers the luxury of picking and choosing from a deep pool of available workers, 2015 may turn out to be the year of the job seeker.
Joseph Coombs is a senior analyst for workforce trends at SHRM.
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