March 9, 2018 – Employers added 313,000 jobs last month as the U.S. unemployment rate remained at an 18 year low of 4.1 percent, according to the most recent U.S. Bureau of Labor Statistics report. The January gain is the 89th consecutive month of job growth. The number of unemployed people was essentially unchanged at 6.7 million. Analysts had predicted job additions of about 200,000 last month.
The surge of job gains may reflect, in part, confidence among some businesses that the Trump administration’s tax cuts will accelerate growth – even though a growing roster of economic experts disagree with that assumption. Consumers are also benefiting from higher after-tax income, which grew last month at the fastest pace in a year, aided by the tax cuts. Some envision the unemployment rate dropping as low as 3.5 percent by the end of 2018.
“I hear my clients saying the tax bill gave them more confidence in the pro-business economy,” said Tom Gimbel, CEO of search firm LaSalle Network. “There’s confidence coming from D.C. that they’re not going to get in the way.”
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Where Job Growth Occurred
- In February, construction employment increased by 61,000, with gains in specialty trade contractors (+38,000) and construction of buildings (+16,000). Construction has added 185,000 jobs over the past four months.
- Retail trade employment increased by 50,000 over the month. Within the industry, employment rose in general merchandise stores (+18,000) and in clothing and clothing accessories stores (+15,000). However, over the past four months, which traditionally see the bulk of the holiday hiring and layoff, employment in these industries has changed little on net. Elsewhere in retail trade, building material and garden supply stores added jobs over the month (+10,000).
- Employment in professional and business services increased by 50,000 in February and has risen by 495,000 over the year. Employment in temporary help services edged up over the month (+27,000).
- Manufacturing added 31,000 jobs in February. Within the industry, employment rose in transportation equipment (+8,000), fabricated metal products (+6,000), machinery (+6,000), and primary metals (+4,000). Over the past year, manufacturing has added 224,000 jobs.
- Financial activities added 28,000 jobs over the month, with gains in credit intermediation and related activities (+8,000); insurance carriers and related activities (+8,000); and securities, commodity contracts, and investments (+5,000). Over the year, financial activities has added 143,000 jobs.
- Employment in mining rose by 9,000 in February, with most of the increase in support activities for mining (+7,000). Since a recent low in October 2016, mining has added 69,000 jobs.
- Employment in healthcare continued to trend up in February (+19,000), with a gain of 9,000 in hospitals. Healthcare has added 290,000 jobs over the past year.
- Employment in other major industries, including wholesale trade, transportation and warehousing, information, leisure and hospitality, and government, showed little change over the month.
2018 Predictions for Talent Acquisition Professionals
The future of talent acquisition will be more personal, more segmented, more strategic and more driven by an up-and-coming generation, according to Korn Ferry Futurestep experts from across the globe. Driving change in 2018 and beyond will be the rapid pace of technological advancement.
“I feel that the economy is in a very good state,” said Patricia Lenkov, founder and president of New York-based Agility Executive Search. “Unemployment is at a very low level and the recent tax cut will generate more investments by companies, more jobs and more disposable income. Business and consumer confidence is also high. It is not perfect because certain sectors, such as retail, are challenged,” she said. “But overall I feel good about the prospects for the immediate future.”
“Talent management remains a highly competitive field, and in fact, some organizations have awarded raises with the specific goal of retaining current talent,” said Shawn Baker, president of Rochester, NY-headquartered search firm Cochran, Cochran & Yale. “We’ve also seen a significant increase in diversity and inclusion strategies across organizations seeking to enhance engagement and improve their employer branding. With today’s competitive marketplace, it has been interesting to see how organizations are finding their edge to attract the best talent.”
“Our outlook on hiring for this year is very bullish and will be a continuation of what we experienced in 2017,” said Matt Shore, president of Sunrise, FL-based executive search firm StevenDouglas. “We are in a candidate driven market and demand for highly skilled professionals from middle management to the C-suite is robust to say the least. Companies and private equity firms are experiencing longer time frames to fill critical positions and candidates are being extremely selective as to what opportunities they entertain,” he said.
“An additional challenge is the fact that many of these candidates are receiving multiple competing offers in a short timeframe and even when they accept one of those positions, their current employers are aggressively counter-offering them to stay,” Mr. Shore said. “Over the last year, we have seen many bidding wars over candidates and we have had clients turn to us after having had multiple turn downs on the same position.”
“Needless to say, this environment has been good for both our executive search and interim resources business and we are investing in new offices and hiring additional recruiters in existing markets to ensure that we execute and capitalize on this great market,” Mr. Shore says. “When search firms like ours are hiring aggressively, it is a great leading indicator of the upcoming year.”
Lack of Available Talent
A company’s workforce is clearly its most valuable asset. The largest expense on any employer’s balance sheet is headcount, and investing in employees and their skills are critical to an organization’s success. Smart employers are acting now to ensure they have the most highly skilled and productive workforce to ensure their organization is prepared for whatever business challenges are coming.
According to the “Definitive Guide” report by Adecco, nearly half (48 percent) of best-in-class companies are already increasing training in critical skill areas to help combat the skills gap. Employees likely want to fill any holes in their skill-set, but cost can be prohibitive. These programs can be expensive. But for companies, the initial investment in alternative training programs may pay lasting dividends, especially where global competition is concerned, said Adecco.
Governments, businesses and employees can learn a lot from what the U.S. economy and workforce endured during the great recession. What is certain is that American workers will show resilience in the face of a daunting labor market, said Adecco. By applying that same resilience, innovation and reinvention to the current skills gap challenge, the report concluded, the American workforce will undoubtedly evolve to meet the needs of the new global economy.
A significant part of the challenge will be balancing the development of soft and hard skills; both will be required to effectively navigate and tackle new industries, technologies and global competitors. And while these are the same dynamics responsible for widening the skills gap, the report said, they will also help connect the American workforce and economy to a greater success and prosperity.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media