CertiPay’s Market Outlook - September 2022
This tight job market seemingly won’t let up.
Many economists saw a previous drop in the job openings in June and said this revealed early signs of recession and signaled a “cooling down” of the job market.
But then the Bureau of Labor Statistics released its latest Job Openings and Labor Turnover Survey (JOLTS) on Aug. 30, which pretty much reversed those predictions, showing an uptick in job openings on the last day of July.
There were other signs too, though. Layoffs in the tech industry spooked other industries and led many to believe that this was a sign of what was soon to come—for everyone from large corporations to small businesses.
And yet, hiring shows no immediate signs of slowing down. Regardless of current economic predictions and recession threats, your business still needs to fill vacancies, and remain competitive in the market.
The number of job openings was 11.2 million on “the last business day of July,” according to JOLTS.
Many of those positions are for hourly employees. We know hourly employees were some of the hardest hit by the increase in inflation, but inflation is finally showing signs of slowing down after easing slightly in July, and the cost of energy and gasoline continues to drop.
Inflation sits at 8.5% after rising previously to a 40-year high of 9.1%.
The unemployment rate in America is 3.7%, and there are roughly 2 jobs for every unemployed person in the U.S.
Nearly 58% of Americans are hourly workers.
71% of hourly workers are under 30, and at least 40% are in their 20s.
Outlook for employers: adapt and evolve
At the beginning of 2022, there were around three million fewer people employed than before the pandemic. This is something all employers are well aware of—the “Great Resignation” or the “Great Reshuffle” became a part of the lexicon for businesses across the U.S.
It peaked with a new record-high of 4.5 million quits in November 2021 and has consistently stayed at over 4 million, with quits totaling about 4.2 million in the latest JOLTS report. Changes like this to the market have put a lot of pressure on businesses to find new ways to bring in talent and fill these job vacancies.
But several things make that more difficult. Across the country, more than 80 million workers 16 years and older, representing well over half of the workforce, are clocking in each day to an hourly job. Those people can spend up to 20 percent of those hourly earnings just commuting to work each day. This is where we start to see a large number of people quitting jobs, and hourly jobs consistently have higher turnover rates.
The cost of turnover is extremely high. Losing an employee can cost a company 1.5-2 times the employee’s salary.
So how do you reverse turnover like this? Many businesses have struggled to meet the needs of the workforce, offer competitive pay rates, properly advertise a position, respond to applicants in an adequate amount of time or and give employees the type of “customer experience” they need to get them hired and keep them on staff.
Jeff Baumohl is the VP of partnerships for Juvo Jobs, a company that developed an app that connects hourly workers to job opportunities in their community. Baumohl has more than 20 years in the HR industry. The app uses a geolocator to organize job openings by location, which not only helps hourly workers looking to save on things like their daily commute, but it also helps promote awareness to different small businesses that have been getting overlooked by applicants in their own community.
Baumohl talks about the need for businesses to adapt to new technology to attract these hourly workers, 71% of which are under 30 and are likely using cell phones to apply for jobs. He says your “employees are also your customers,” so you should put a greater focus on improving their overall experience, as well.
“You have to meet your audience where they are at. You’ve got tools and content that’s much better than now than it used to be,” he says. “Our consumer experience has gotten so better—whether it’s Amazon, Netflix or whatever it may be—so businesses need to replicate that consumer experience for employees because if you’re not, you are losing your audience.”
Meet candidates where they are
This is a highly competitive job market for business owners looking for applicants, but it’s not that easy for applicants either. Looking for a new job can be tough, even with two openings for each applicant. One report says it takes anywhere from 100 to 200 applications for the average job-seeker to receive a single job offer.
So, what can be done to make this relationship mutually beneficial for both job seekers and the ones who will employ them? Baumohl offers a few suggestions:
Responsiveness is key: Any delay you put in responding to a job applicant can be a missed opportunity to hire the best person for the job. He says that from Juvo’s data when someone applies for one job, they are only a few clicks away from applying for four more.
Use technology to your advantage: Business owners can’t just sit back and wait to fill a position from the want ads or traditional job boards anymore. They need to use the top technology on the market to track applicants, find passive candidates and make the application process easy for everyone.
Talent management is not just for large corporations anymore, and the use of new technology can help businesses hire in the short term, which also helps them as they plan for the long term. As the job market remains strong and highly competitive, small to mid-sized businesses need to take every possible advantage they can get to land the best possible hire—because that’s ultimately what’s going to help them control their turnover and save money on all the costs associated with turnover.
Bureau of Labor Statistics: Job Openings and Labor Turnover Summary
HR Dive: Hourly workers: Who they are, what they want and where they’re going
Forbes: America’s Hourly Workers
Builtin: The True Cost of Employee Turnover
Bankrate: Average Cost of Commuting