Bob Marshall’s June 2016 BLS Analysis for Recruiters; 7/8/16
June BLS Preface
TBMG Coaching Updates and News
Bob Marshall – Training/Coaching Updates:
Top Echelon, Tuesday Training Series, Webinar, Part I, July 26th, 2016
My next Top Echelon presentation will be on Tuesday afternoon, July 26th, 2016, at 1pm, Eastern Time. This Tuesday Training will be for TE members. The 30 minute presentation is entitled, “Marketing a Blended Desk – Part I” and will focus on ‘why’ you should work a blended desk.
Top Echelon, Tuesday Training Series, Webinar, Part II, August 23rd, 2016
Part Two (on the heels of my July Top Echelon presentation) will be on Tuesday afternoon, August 23rd, 2016, at 1pm, Eastern Time. This Tuesday Training will again be for TE members. The 30 minute presentation is entitled, “Marketing a Blended Desk – Part II” and will focus on ‘how’ to work a blended desk.
The Nebraska Association of Personnel Consultants (NAPC) Fall Seminar, Omaha, Nebraska, September 23rd, 2016
I will be presenting to the NAPC Fall Seminar on Friday, September 23rd, 2016, in Omaha, Nebraska. My presentations will run from 9:00 am to 3:00 pm. The titles of the presentations will include: “3 Proven Methods to landing New Clients”; “How to Inject Urgency into the Candidate”; and “How to Inject Urgency into the Hiring Process”.
* Special Nebraska Note: For those of you in the Omaha area, if you are interested in my in-office training (individual and desk-level) and are available for that training during September 19-26, please let me know for a special offer. Since I will be in Omaha for my NAPC presentation, I will offer a 50% discount on my usual fees and no charge for my airfare. First come, first served, so contact me for specific details as soon as possible. Thanks!
Top Echelon, Tuesday Recruiter Coaching Series, Webinar, December 13th, 2016
My next Top Echelon presentation will be on Tuesday afternoon, July 26th, 2016, at 1pm, Eastern Time. This Recruiter Coaching Series will be for TE members. The 60 minute presentation is entitled, “Make Placements by Overcoming Objections with Contract Staffing”.
Taking the first step…
Over 36 years ago I began a career that turned out to be the most dynamic and rewarding professional move I have ever made. With the opportunity to earn an unlimited income at my fingertips, I began my career as a Recruiter.
Soon I became a student of the business and transitioned into Coaching. I traveled extensively and learned and listened and I packaged my material in a unique way. I studied many of the top producers in the recruiting industry and developed a series of training tools based on their proven success—training techniques that work time and time again.
I developed these tools and coaching techniques to help others achieve their goals as top producing professional recruiters. I continue to base all of my coaching and training tools on the same “nuts and bolts” approach I used as a recruiter.
I realize that taking that first step to engage a Coach to help you reach a higher level of production is not as easy as it sounds. After all, your training investment – and your time – are important and deserve every consideration. I share your feelings. I believe that how you approach your recruitment career matters…that you should get what you pay for, and then some…that you should enjoy your time with your Coach as you are benefiting from it…and that you should never settle for the ordinary.
If you are ready to take the first step, you can read descriptions of my coaching plans, and all of my products, on my website @ www.themarshallplan.org. Then, call me directly at 770-898-5550 or email me @ email@example.com.
Many of you continue to correspond with me about these monthly BLS analyses and have asked if it is OK to use them in your presentations. The answer is, of course, yes! That is why I spend the time to assemble this information. I would encourage any of you who have that desire to weave any of the information I have printed below into your presentations. I write these analyses for the benefit of our recruitment industry in general and for the members of my distribution list in particular. So use this info as you deem appropriate.
I also write these monthly BLS analyses to not only counterbalance the negative/incorrect press reporting of our general economic state but, more than that, to remind all of my recruitment readers that, at the level we work, there is no unemployment and so we must recruit to find the candidates our client companies so desperately need!
So, to my recruiter colleagues, get out there and do what your name implies…RECRUIT! When your client companies have unique and difficult positions to fill, they need you. When they are being picky, they need you. When they are longing for more production from fewer employees, they need you. Go fill those needs. These should be the halcyon days in the recruitment arena!
Finally, always remember that we are not in an HR business, but in a ‘circumventing the time factor in the hiring sequence’ business—and adding value to our client companies.
US Hiring Managers expect more hiring in 2nd half of 2016
Daily News, July 6, 2016
Most US hiring managers expect to increase hiring in the year ahead, according to the semi-annual hiring survey released today by job board operator DHI Group Inc. The survey found 62% of hiring managers and recruiters in the US anticipate more hiring in the next 6 months, a slight uptick of 1 point from a similar survey conducted in December 2015.
While more hiring is anticipated, the time to fill a position is taking longer than ever as recruiters across a variety of industries — and in healthcare and technology in particular — struggle to find qualified talent, the report found.
DHI’s index measuring job vacancy duration reached an all-time high of 29.3 working days in April (the latest data available), demonstrating jobs are staying open longer than any time since tracking began in 2001. And healthcare positions remained open more than 49 days on average in April, the longest of any industry, and 7 days more than financial services positions, which are the 2nd longest to fill.
“Hiring managers broadly, and those in technology and healthcare specifically, find it increasingly difficult to find candidates with the right combination of skills to fill positions,” said DHI President and CEO Michael Durney. “The recent vote by citizens in the UK will likely have an impact on US hiring decisions in the near term and future, further lengthening the time to fill roles as global employers navigate this new landscape.”
The report found 31% of those who recruit for a variety of professionals and 46% focused on healthcare said they are waiting for the perfect match to fill a role. However, in technology, where telecommuting is more prevalent, only 18% of tech-focused recruiters wait it out. More hiring managers, 53%, broaden their search geographically to find the best talent.
Candidates are also asking for higher pay than years past. 60% of hiring managers across industries and those recruiting tech pros say candidates are asking for more money as compared to 6 months ago. In healthcare, where demand for professionals is outpacing available candidates, this rises to 66%. As a result, 57% of overall recruiters, 61% of healthcare and 56% of those focused on tech, anticipate salaries for new employees being higher than last year.
The survey included 421 US hiring professionals who recruit for a variety of professionals, 315 for healthcare and 552 for technology. It was conducted from May 16 to May 20 and then from June 6 to June 10.
New GDP Estimate Higher Than Last but Still Weak
Daily News, June 28, 2016
US real gross domestic product grew at an annual rate of 1.1% in the first quarter, according to a 3rd estimate of GDP growth by the US Commerce Department. The new estimate is improved from an earlier 2nd estimate that pegged growth at 0.8%.
MarketWatch reports the growth was still weak compared to past years.
“In the first quarter, GDP grew faster than previously estimated, but growth remained modestly slower than the 1.4% rate in the 4th quarter of 2015,” Jason Furman, chairman of the Council of Economic Advisors, wrote in a blog post. “GDP growth was supported by strength in residential investment, which increased 15.6%. Consumer spending grew 1.5%, a moderate pace but below its rate over the prior 4 quarters. Business investment contracted 4.5% in the 1st quarter, reflecting ongoing declines in oil-related structures investment as well as a decline in equipment investment. Slowing global demand continues to remain a key headwind to output growth, though real exports increased 0.3% in the 1st quarter.”
Separately, The Conference Board reported that its consumer confidence index improved in May to a reading of 98.0 (1985=100) from a reading of 92.4 in May.
“Consumer confidence rebounded in June, after declining in May,” said Lynn Franco, director of economic indicators at The Conference Board. “Consumers were less negative about current business and labor market conditions, but only moderately more positive, suggesting no deterioration in economic conditions, but no strengthening either. Expectations regarding business and labor market conditions, as well as personal income prospects, improved moderately. Overall, consumers remain cautiously optimistic about economic growth in the short-term.”
It Turns Out Millennials Really Aren’t That into Freelancing
Fortune, Jeremy Quittner, June 23, 2016
As the gig economy offers more freelance work, younger workers want stability.
More workers expect to become independent contractors in the next few years, even though many would prefer stable jobs.
That’s a key takeaway from a new study about the future of work released by consultancy PwC on Wednesday. The findings suggest younger workers in particular see freelancing on the horizon, although overwhelmingly they want job security and have less desire to work as independent contractors than older workers.
The findings are important to small-business owners who often say finding enough qualified employees is a top concern. The data also reflects concerns as the economy shifts to the so-called gig economy, with increasing numbers of people working for tech companies, such as Uber and Airbnb, that offer independent contracting positions without benefits or fixed hours.
Nearly 54,000,000 workers, or roughly a third of the U.S. workforce, do some freelance work. About 15,000,000 people say they are self-employed, according to PwC, which cited data from the Freelancers Union and the Department of Labor, respectively.
“A lot of people believe that the millennial workforce is very open to independent work and the freelance gig economy, but the survey is not confirming that,” says Justin Sturrock, leader of PwC’s people and organization practice.
In fact, 41% of all employees say they expect to be independent contractors in the next 12 months, according to the survey, and 53% expect to be self-employed in the next 5 years. Yet 39% say the uncertainty of income is an unappealing part of freelancing.
Older workers tend to have fewer problems with a potential shift to contract work. 65% of workers 50 years old and over say they’d like to work as independent contractors, which is roughly double the percentage of workers younger than 34 who express that desire. That’s because older workers tend to have more financial independence, and a skills set developed from years of work that would let them transition more easily to independent work, Sturrock says.
Yet, as is often the case, the youngest workers are less tied to their companies compared to their older peers, which could prompt a bigger move to freelance work. While 55% of Baby Boomers say they are in a “committed partnership” with their employers, only a third of workers under the age of 35 say they are committed. Similarly, younger workers feel less trust for their employers: Just 38% of Gen Z workers, defined as those 22 or younger, say they trust their employers, compared to 56% of workers over 50 years old.
With that in mind, 19% of Baby Boomers say they are likely to change jobs in the next 6 months, compared to 33% of millennials and nearly 50% of Gen Zers.
Small businesses have a potential edge as labor is in flux, however, according to the study. It turns out 80% of small–business employees say they feel appreciated at work. Similarly, 43% of small–business workers say they are happy at work, compared to 27% of peers at larger businesses.
One big reason for the difference in attitude is that small businesses have reputations as being more flexible with work policies. And some policies that seem to make employees at small companies happier include the ability to work from home, and setting more flexible hours and schedules.
“Smaller organizations…have a stronger connectivity with their colleagues, with their market, their products, and their customers,” Sturrock says.
PWC interviewed 1,385 US workers and 200 C-suite executives in an online survey in May. Roughly 50% of the businesses were small, and roughly 50% of the workers worked in smaller companies.
IMF Lowers US Economic Forecast (Fox Business)
Daily News, June 22, 2016
Fox Business reported the International Monetary Fund downgraded its forecast for the US economy. It now calls for growth of 2.2% this year, down from a forecast in April that called for 2.4% growth.
It also said the Federal Reserve should hold off on raising interest rates.
In addition, the IMF warned that declining labor force participation, falling productivity growth, a widening income gap and high levels of poverty could further hamper the US economy to expand.
Millennials Have Management Potential, Robert Half CFO Survey Says
Daily News, June 22, 2016
(My note: Millennials, or the Gen Y, were born from 1981-2000 and are aged 16-35 this year)
CFOs in the US are confident that millennials have management potential, according to a survey by Robert Half International Inc. Of the 2,200 CFOs surveyed, 85% said they are confident in millennials’ future leadership abilities.
“Millennials are a highly educated, ambitious group who gravitate toward jobs that provide meaningful personal and professional growth,” Paul McDonald, senior executive director at Robert Half, said. “To retain these employees and develop them into next-generation leaders, companies must provide plenty of training and stretch assignments as well as clear paths for career advancement.”
To help develop millennials, 60% of CFOs said their organizations provide onsite training. In addition, 57% say their companies provide opportunities for millennials to attend conferences, seminars and webinars, and 55% say their companies provide mentoring programs.
“Managers should also recognize millennial workers’ desire for frequent feedback,” McDonald said. “Even the best performers benefit from consistent coaching.”
Lengthy Hiring Practices, Misconceptions Make Companies Lose Out On Talent
Daily News, June 17, 2016
Lengthy hiring practices and misconceptions about what motivates top candidates to make a job move are causing companies to lose out on high performers in an already tight talent market, according to the 2016 MRINetwork Recruiter & Employer Sentiment Study. Companies that want to attract and retain the best talent will need to revisit their interviewing and talent management approaches to create a strong employer brand, the report says.
The study found 86% of recruiters and 62% of employers feel the labor market is candidate-driven in their industry sectors. In this environment, candidates confidently reject undesirable job offers, with recruiters and employers listing “accepted another offer” as the primary reason for offer objections, according to the report.
Half of companies cited the lack of suitable talent as their No. 1 challenge to hiring. However, recruiters complained that companies take too long to hire, even when they do meet ideal candidates. Employers now extend offers between 3 to 6 weeks from the candidate’s 1st interview, a shift from 1 to 4 weeks that was observed in the 2nd half of 2015.
Additional highlights and conclusions from the MRINetwork survey:
*Employers and recruiters agree newly created positions are still the primary reason for job openings followed by vacancies from resignations.
*Recruiters indicated vacancies from retirements are increasing, making this the 3rd most selected reason for job openings (17%).
*In addition to accepting other offers and low compensation packages, employers listed counteroffers as a top reason for rejected offers.
The web-based survey included 239 recruiters and was conducted between May 3 and May 17, 2016. A focus group of 54 human resources professionals and hiring managers additionally provided insight.
Quarter of Ad and Marketing Execs to Freeze Hiring
Daily News, June 16, 2016
Companies in the creative field plan to increase hiring freezes in the 2nd half of the year, according to a new survey from The Creative Group, a marketing/creative staffing division of Robert Half International Inc.
The survey found 25% of hiring managers at advertising agencies and marketing departments project hiring freezes, up from 10% in the same survey 6 months ago and 13% in a similar survey a year ago; 3% expect to reduce the size of their staff.
The survey also found 13% of hiring managers at advertising agencies and marketing departments said they will add new positions to their creative teams in the 2nd half of 2016. Although this is up from 11% in a similar survey 6 months ago, it is a decrease from 21% in a year-ago survey.
The majority of respondents, 59%, said they expect to maintain staff levels and hire primarily to fill vacated roles in the next 6 months. In addition, 20% of advertising executives and 10% of marketing executives anticipate increasing the number of freelance staff during the remainder of the year.
Recruiting remains difficult for advertising and marketing executives, with 41% reporting it is difficult to find skilled creative professionals today. Hiring managers at small advertising agencies (20 to 49 employees) and large advertising agencies (100-plus employees) expect the greatest difficulty, with 50% of respondents in each group reporting it is somewhat or very challenging to find the talent they seek.
“Many companies are adding to their bench of marketing talent, particularly within the digital space,” said Diane Domeyer, executive director of The Creative Group. “Employers seek professionals who can help build their businesses’ online presence, support year-end campaigns and strategize for the future.”
Advertising and marketing executives were asked, “In which of the following areas do you expect to hire in the second half of 2016?” The top 10 responses:
*Content marketing: 18%
*Brand/product management: 18%
*Digital marketing: 18%
*Web design/production: 18%
*Marketing research: 17%
*Creative/art direction: 17%
*Print design/production: 17%
*Customer experience: 17%
*Social media: 16%
*Media services: 15%
The survey is based on 400 telephone interviews — with 200 marketing executives randomly selected from companies with 100 or more employees and 200 with advertising executives randomly selected from agencies with 20 or more employees.
US Turnover Increasing, Skill Shortage Problematic, Randstad Report Finds
Daily News, June 15, 2016
The inadequate supply of qualified and skilled talent is the second-biggest threat to US companies’ ability to meet revenue or business performance targets, 2nd only to “increased competitive pressures,” according to the Randstad US Workplace Trends report. Meanwhile, increasing turnover rates are exacerbating the challenge with 41% of companies indicating their turnover rate increased in the last year.
67% of decision-makers said they are more concerned about turnover at their organizations now than they were 12 months ago, with survey participants naming “talent being recruited by competitors” as the top reason behind their turnover. Additionally, 70% report their employees’ decisions to leave are primarily due to receiving a better offer elsewhere.
The survey also found 75% of companies surveyed agreed it takes more time this year than last year to find the right talent to fill positions, with the average time to hire a non-executive candidate exceeding two months. HR decision-makers report the average time to fill a non-executive position is 2.6 months and 5 months for leadership or executive talent. On average, companies report they are currently 13% understaffed, according to the Randstad study.
“Often the challenge for hiring executives isn’t the quantity of available candidates, instead it’s the increasing difficulty in finding talent that is qualified, with the right skills and cultural fit for the position,” said Jim Link, CHRO of Randstad North America. “In fact, our study found that three-quarters of HR decision-makers agree that compared to last year, it is taking more time to find the right talent to fill positions.”
Despite signs that companies may need to increase salaries to recruit and retain top talent, most have kept their wages the same. Only one-third of companies have increased their salaries in the last 12 months, while 60% have kept them the same as they were 12 months ago.
Despite little upward movement in salaries, companies acknowledge that wage increases can greatly improve turnover. Respondents named “salary increases” as the most effective program at decreasing turnover rates, followed by opportunities for advancement and bonuses.
“The reality is inflation-adjusted wages for typical workers have barely budged in the past five years,” Link said. “The lack of wage increases plaguing the country’s labor market has allowed companies to contain costs and regain capital, however the honeymoon appears to be over. According to our survey findings, the increasing turnover rates and recruiting difficulties among companies can be directly attributed to the absence of wage growth.”
The report includes findings from a Research Now survey conducted from November to December 2015. The survey included 2,004 hiring decision makers working in a variety of sectors.
Economists Lower GDP Projections in New NABE Survey
Daily News, June 6, 2016
Economists surveyed by the National Association for Business Economics lowered their growth projections for the US economy in 2016 and 2017, the association announced today.
The forecaster’s median forecast in the new survey is for inflation-adjusted US real gross domestic product to grow at an annualized rate of 1.8% in 2016, down from 2.2% forecasted in a March survey. The median forecast for 2017 edged down to 2.3% real GDP growth from 2.4% in the March survey.
Real GDP grew 2.4% in 2015.
The June NABE Outlook Survey marks the third consecutive markdown of 2016 real GDP growth by respondents, according to NABE President Lisa Emsbo-Mattingly, director of research, Global Asset Allocation at Fidelity Investments. “Nearly 60% of the panel views uncertainty surrounding the upcoming election as damaging to GDP growth in 2016,” she said.
“More broadly, nearly 4 out of 10 survey participants view the rise of nationalist views around the world as the most important factor likely to constrain economic growth over the next 2 years,” said Gregory Daco, head of US macroeconomics, Oxford Economics USA. “NABE panelists expect the Federal Reserve to raise its federal funds target rate 2 more times this year but no longer expect one of those rate hikes to occur in June,” added John Silvia, chief economist at Wells Fargo. “The end-of-year Fed funds targets for both 2016 and 2017 have been lowered slightly.”
Panelists forecast nonfarm payroll growth to average 201,000 jobs per month in 2016 — up from 195,000 forecast in the March survey — and then slow modestly to 192,000 per month in 2017 as the labor market approaches full employment. The projected job creation figure for 2017 reflects an increase from the 179,000 jobs per month anticipated in the March survey.
The unemployment rate is now expected to average 4.8% in 2016, up from 4.7% projected in the March survey, and then decline to 4.6% by the fourth quarter of 2017.
NABE is a professional association for business economists and others who use economics in the workplace. The survey included 48 forecasters and was conducted from May 2 to May 17, 2016.
The new ADP/Moody’s National Employment Report: Over 85% of all new job growth in June, 2016 came from Small and Mid-size Companies!
July 7, 2016
Private sector employment increased by 172,000 jobs from May to June (a 1,000 job decrease from May’s 173,000 additions), according to the June ADP National Employment Report®, which is produced by ADP® in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.
By Company Size
Small businesses: 95,000
1-19 employees 52,000
20-49 employees 43,000
Medium businesses: 52,000
50-499 employees 52,000
Large businesses: 25,000
500-999 employees 21,000
1,000+ employees 4,000
Goods producing <-36,000>
Service providing 208,000
Financial activities 2,000
Professional/business services 51,000
Franchise Jobs 40,700
Payrolls for businesses with 49 or fewer employees increased by 95,000 jobs in June, up from 84,000 in May. Employment at companies with 50-499 employees increased by 52,000 jobs, down from last month’s 60,000. Employment at large companies – those with 500 or more employees – increased by 25,000, up from May’s 23,000. Companies with 500-999 employees added 21,000 and companies with over 1,000 employees added 4,000 this month.
Goods-producing employment was down by 36,000 jobs in June after an additional loss of 5,000 jobs in May. The construction industry lost 5,000 jobs, offsetting May’s gain of 9,000 jobs. Meanwhile, manufacturing lost 21,000 jobs after losing 3,000 the previous month.
Service-providing employment rose by 208,000 jobs in June, a stronger increase when compared to May’s 173,000 jobs. The report indicates that professional/business services contributed 51,000 jobs, up from May’s 47,000. Trade/transportation/utilities grew by 55,000, nearly twice that of the 27,000 jobs added the previous month. Financial activities added 2,000, down from last month’s gain of 13,000 jobs.
“Since the start of 2016, average monthly job creation has slightly dropped,” said Ahu Yildirmaz, VP and head of the ADP Research Institute. “Lackluster global growth, low commodity prices, and an unfavorable exchange rate continue to weigh on U.S. companies, especially larger companies.”
Mark Zandi, chief economist of Moody’s Analytics, said, “Job growth revived last month from its spring slump. Job growth remains healthy except in the energy and trade-sensitive manufacturing sectors. Large multinationals are struggling a bit, and Brexit won’t help, but small- and mid-sized companies continue to add strongly to payrolls.”
(The July 2016 ADP National Employment Report will be released at 8:15 a.m. ET on August 3, 2016).
Due to the important contribution that small businesses make to economic growth, employment data that is specific to businesses with 49 or fewer employees is reported each month in the ADP Small Business Report®, a subset of the ADP National Employment Report.
June 2016 Small Business Report Highlights
Total Small Business Employment: 95,000
|●By Sector for 1-49 Employees|
|●By Sector for 1-19 Employees|
|●By Sector for 20-49 Employees|
Bottom-line: To my audience of recruiters, always remember this: Our ‘bread and butter’, especially on the contingency side of the house, has historically been, and continues to be, small and medium-sized client companies. Along with the large companies, these companies need to be in included in your niche!
Job Openings and Labor Turnover Summary – April 2016
On June 8th, the U.S. Bureau of Labor Statistics (BLS) reported that the number of job openings was little changed at 5,800,000 on the last business day of April, the U.S. Bureau of Labor Statistics reported today. Hires edged down to 5,100,000 while separations were little changed at 5,000,000. Within separations, the quits rate was 2.0%, and the layoffs and discharges rate was 1.1%. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by 4 geographic regions.
Job openings were little changed at 5,800,000 in April. The job openings rate was 3.9%. The number of job openings was little changed in April for total private and for government. Job openings increased in a number of industries, with the largest changes occurring in wholesale trade (+65,000), transportation, warehousing, and utilities (+58,000), durable goods manufacturing (+46,000), and real estate and rental and leasing (+41,000). Job openings decreased in professional and business services (-274,000). The number of job openings was little changed in all 4 regions.
The number of hires edged down to 5,100,000 in April. The hires rate was 3.5%. The number of hires was little changed in April for total private and edged down for government (-31,000). Hires were little changed in all industries in April and decreased in the Midwest region.
Total separations includes quits, layoffs and discharges, and other separations. Total separations is referred to as turnover. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, and disability, as well as transfers to other locations of the same firm.
There were 5,000,000 total separations in April, little changed from March. The total separations rate in April was 3.5%. The number of total separations was little changed over the month for total private and for government. All industries experienced little change in total separations over the month. In the regions, the number of total separations declined in the Midwest.
The number of quits was little changed in April at 2,900,000. The quits rate was 2.0%. Over the month, the number of quits was little changed for total private and for government. Quits increased in arts, entertainment, and recreation (+15,000) but decreased in construction (-45,000) and mining and logging (-5,000). The number of quits decreased in the Northeast region.
There were 1,600,000 layoffs and discharges in April, little changed from March. The layoffs and discharges rate was 1.1%. The number of layoffs and discharges was little changed over the month for total private and for government. In April, layoffs and discharges declined in professional and business services (-81,000). In the regions, layoffs and discharges decreased in the Midwest.
In April, other separations edged up for total nonfarm and for total private, and was little changed for government. The number of other separations rose in health care and social assistance (+20,000), accommodation and food services (+13,000), and information (+7,000). The number of other separations was little changed over the month in all 4 regions.
Net Change in Employment
Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising. Over the 12 months ending in April, hires totaled 62,400,000 and separations totaled 59,700,000, yielding a net employment gain of 2,700,000. These totals include workers who may have been hired and separated more than once during the year.
____________The Job Openings and Labor Turnover Survey results for May 2016 are scheduled to be released on Tuesday, July 12, 2016.
As we recruiters know, that 5,800,000 number only represents 20% of the jobs currently available in the marketplace. The other 80% of job openings are unpublished and are filled through networking or word of mouth or by using a RECRUITER. So, those 5,800,000 published job openings now become a total of 29,000,000 published and hidden job orders.
In June there were 7,783,000 unemployed workers. What was the main reason why those workers were unemployed? Two Words: Structural Unemployment. If we can’t figure out how to educate and/or reeducate those 7,783,000 unemployed, then they will keep reappearing each month as a BLS unemployment statistic—as they have. In the meantime, our recruitment marketplace flourishes!
Online Labor Demand Decreased 226,700 in June
July 6, 2016
* The June loss follows a larger drop in May of 285,800
* The May and June losses have been widespread across online job boards
* Both the Professional and the Services/Production occupation have been hard hit
Online advertised vacancies decreased 226,700 to 4,657,500 in June, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series, released today. The May Supply/Demand rate stands at 1.52 unemployed for each advertised vacancy with a total of 2,600,000 more unemployed workers than the number of advertised vacancies. The number of unemployed was around 7,400,000 in May.
“The losses in the first quarter of 2016 have been followed with even larger losses in the second quarter,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “The 2016 slowdown in demand has been widespread, affecting virtually all States and MSAs.”
In June, the Professional category saw losses in all major occupational categories with the largest losses in Management (−24.1), Business/Finance (−21.3), and Computer/Math (−34.8). The Services/Production category saw large losses in Sales (−26.3), Office/Admin (−33.1), and Installation/Repair (−13.4); other categories showed only small gains and losses.
The Conference Board Help Wanted OnLine®Data Series (HWOL) measures the number of new, first-time online jobs and jobs reposted from the previous month for over 16,000 Internet job boards, corporate boards and smaller job sites that serve niche markets and smaller geographic areas.
(The June 2016 Conference Board Help Wanted OnLine® (HWOL) Data Series will be released at 10:00 AM ET on Wednesday, August 3, 2016).
In June, 2016 the regular unemployment number rose to 4.9%, and the broader U-6 measure fell to 9.6%, .2% less than twice as high as the regular unemployment figure.
The above 9.6% is referred to as the U6 unemployment rate (found in the monthly BLS Employment Situation Summary, Table A-15; Table A-12 in 2008 and before). It counts not only people without work seeking full-time employment (the more familiar U-3 rate), but also counts “marginally attached workers and those working part-time for economic reasons.” Note that some of these part-time workers counted as employed by U-3 could be working as little as an hour a week. And the “marginally attached workers” include those who have gotten discouraged and stopped looking, but still want to work. The age considered for this calculation is 16 year and over.
Here is a look at the June U-6 numbers for the past 13 years:
June 2015 10.5%
June 2014 12.0%
June 2013 14.2%
June 2012 14.8%
June 2011 16.2%
June 2010 16.5%
June 2009 16.5%
June 2008 10.1%
June 2007 8.3%
June 2006 8.4%
June 2005 9.0%
June 2004 9.6%
June 2003 10.3%
The June BLS Analysis
The unemployment rate is published by the Bureau of Labor Statistics, a division of the US Department of Labor. The rate is found by dividing the number of unemployed by the total civilian labor force. On July 8th, 2016, the BLS published the most recent unemployment rate for June, 2016 of 4.9% (actually it is 4.899, up by .207% from 4.692% in May, 2016.
The unemployment rate was determined by dividing the unemployed of 7,783,000 (—up from the month before by 347,000—since June, 2015 this number has decreased by 479,000) by the total civilian labor force of 158,880,000 (up by 414,000 from May, 2016). Since June 2015, our total civilian labor force has increased by 1,896,000 workers.
(The continuing ‘Strange BLS Math’ saga): The BLS continues to increase the total Civilian Noninstitutional Population—this time up to 253,397,000. This is an increase of 223,000 from last month’s increase. In one year’s time, this population has increased by 2,734,000. The Civilian Noninstitutional Population has increased each month by…)
|Up from May 2016||by||223,000|
|Up from April 2016||by||205,000|
|Up from March 2016||by||201,000|
|Up from February 2016||by||191,000|
|Up from January 2016||by||180,000|
|Up from December 2015||by||461,000|
|Up from November 2015||by||189,000|
|Up from October 2015||by||206,000|
|Up from September 2015||by||216,000|
|Up from August 2015||by||229,000|
|Up from July 2015||by||220,000|
|Up from June 2015||by||213,000|
|Up from May 2015||by||208,000|
|Up from April 2015||by||189,000|
|Up from March 2015||by||186,000|
|Up from February 2015||by||191,000|
|Up from January 2015||by||176,000|
|Up from December 2014||by||696,000|
|Up from November 2014||by||143,000|
|Up from October 2014||by||187,000|
|Up from September 2014||by||211,000|
|Up from August 2014||by||217,000|
|Up from July 2014||by||206,000|
|Up from June 2014||by||209,000|
|Up from May 2014||by||192,000|
|Up from April 2014||by||183,000|
|Up from March 2014||by||181,000|
|Up from February 2014||by||173,000|
|Up from January 2014||by||170,000|
|Up from December 2013||by||170,000|
|Up from November 2013||by||178,000|
|Up from October 2013||by||186,000|
|Up from September 2013||by||213,000|
|Up from August 2013||by||209,000|
|Up from July 2013||by||203,000|
|Up from June 2013||by||204,000|
|Up from May 2013||by||189,000|
|Up from April 2013||by||188,000|
|Up from March 2013||by||180,000|
|Up from February 2013||by||167,000|
|Up from January 2013||by||165,000|
|Up from December 2012||by||313,000|
|Up from November 2012||by||176,000|
|Up from October 2012||by||191,000|
|Up from September 2012||by||211,000|
|Up from August 2012||by||206,000|
|Up from July 2012||by||212,000|
|Up from June 2012||by||199,000|
|Up from May 2012||by||189,000|
|Up from April 2012||by||182,000|
|Up from March 2012||by||180,000|
|Up from February 2012||by||169,000|
|Up from January 2012||by||335,000|
|Up from December 2011||by||2,020,000|
And this month the BLS has increased the Civilian Labor Force to 158,880,000 (up from May by 414,000).
Subtract the second number (‘civilian labor force’) from the first number (‘civilian noninstitutional population’) and you get 94,517,000 ‘Not in Labor Force’—down by 191,000 from last month’s 94,708,000. Since June, 2015, 838,000 US workers have vanished! Where did those 838,000 potential workers disappear to in one year’s time? I am assuming they still have to eat and pay their rent. They still need money, don’t they? The government tells us that most of these NILFs got discouraged and just gave up looking for a job. My monthly recurring question is: “If that is the case, how do they survive when they don’t earn any money because they don’t have a job? Are they ALL relying on the government to support them??”
This month our Employment Participation Rate—the population 16 years and older working or seeking work—rose .1% to 62.7%. This is .3% above the historically low rate of 62.4% recorded in September and October—and, before that, the rate recorded in October 1977—9 months into Jimmy Carter’s presidency—38 years ago!
Final take on these numbers: Fewer people looking for work will always bring down the unemployment rate.
Anyway, back to the point I am trying to make. On the surface, these new unemployment rates are scary, but let’s look a little deeper and consider some other numbers.
The unemployment rate includes all types of workers—construction workers, government workers, etc. We recruiters, on the other hand, mainly place management, professional and related types of workers. That unemployment rate in June was 2.8% (this rate was .7% above last month’s 2.1%). Or, you can look at it another way. We usually place people who have college degrees. That unemployment rate in June was 2.5% (this rate was .1% above last month’s 2.4%).
Now stay with me a little longer. This gets better. It’s important to understand (and none of the pundits mention this) that the unemployment rate, for many reasons, will never be 0%, no matter how good the economy is. Without boring you any more than I have already, let me add here that Milton Friedman (the renowned Nobel Prize-winning economist), is famous for the theory of the “natural rate of unemployment” (or the term he preferred, NAIRU, which is the acronym for Non-Accelerating Inflation Rate of Unemployment). Basically, this theory states that full employment presupposes an ‘unavoidable and acceptable’ unemployment rate of somewhere between 4-6% with it. Economists often settle on 5%, although the “New Normal Unemployment Rate” has been suggested to fall at 6.7%.
Nevertheless (if you will allow me to apply a ‘macro’ concept to a ‘micro’ issue), if this rate is applied to our main category of Management, Professional and Related types of potential recruits, and/or our other main category of College-Degreed potential recruits, we are well below the 4-6% threshold for full employment…we find no unemployment! None! Zilch! A Big Goose Egg!
THE IMPORTANCE OF GDP
“The economic goal of any nation, as of any individual, is to get the greatest results with the least effort. The whole economic progress of mankind has consisted in getting more production with the same labor…Translated into national terms, this first principle means that our real objective is to maximize production. In doing this, full employment—that is, the absence of involuntary idleness—becomes a necessary by-product. But production is the end, employment merely the means. We cannot continuously have the fullest production without full employment. But we can very easily have full employment without full production.”
—Economics in One Lesson, by Henry Hazlitt, Chapter X, “The Fetish of Full Employment”
On June 28th, the US Bureau of Economic Analysis (BEA) announced the real gross domestic product (GDP) — the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for pricec hanges — increased at an annual rate of 1.1% in the 1st quarter of 2016, according to the “3rd” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 1.4%.
The GDP estimate released today is based on more complete source data than were available for the “2nd” estimate issued last month. In the 2nd estimate, the increase in real GDP was 0.8%. With the 3rd estimate for the 1st quarter, the general picture of economic growth remains the same; exports increased more than previously estimated. The increase in real GDP in the 1st quarter reflected positive contributions from personal consumption expenditures (PCE), residential fixed investment, state and local government spending, and exports that were partly offset by negative contributions from nonresidential fixed investment, private inventory investment, and federal government spending. Imports, which are a subtraction in the calculation of GDP, decreased. The deceleration in real GDP in the first quarter primarily reflected a deceleration in PCE, a larger decrease in nonresidential fixed investment, and a downturn in federal government spending that were partly offset by upturns in state and local government spending and exports and acceleration in residential fixed investment.
*The economy needs to expand at about +3% to keep the unemployment rate from rising.
(The “advance” estimate for the 2nd Quarter 2016 GDP will be released on July 29th, 2016). Annual Revision: 2013 through First Quarter 2016.
IT IS IMPOSSIBLE FOR UNEMPLOYMENT EVER TO BE ZERO
‘Unemployment’ is an emotional ‘trigger’ word…a ‘third rail’, if you will. It conjures up negative thoughts. But it is important to realize that, while we want everyone who wants a job to have the opportunity to work, unemployment can never be zero and, in fact, can be disruptive to an economy if it gets too close to zero. Very low unemployment can actually hurt the economy by creating an upward pressure on wages which invariably leads to higher production costs and prices. This can lead to inflation. The lowest the unemployment rate has been in the US was 2.5%. That was in May and June 1953 when the economy overheated due to the Korean War. When this bubble burst, it kicked off the Recession of 1953. A healthy economy will always include some percentage of unemployment.
There are five main sources of unemployment:
- Cyclical (or demand-deficient) unemployment – This type of unemployment fluctuates with the business cycle. It rises during a recession and falls during the subsequent recovery. Workers who are most affected by this type of unemployment are laid off during a recession when production volumes fall and companies use lay-offs as the easiest way to reduce costs. These workers are usually rehired, some months later, when the economy improves.
- Frictional unemployment – This comes from the normal turnover in the labor force. This is where new workers are entering the workforce and older workers are retiring and leaving vacancies to be filled by the new workers or those re-entering the workforce. This category includes workers who are between jobs.
- Structural unemployment – This happens when the skills possessed by the unemployed worker don’t match the requirements of the opening—whether those be in characteristics and skills or in location. This can come from new technology or foreign competition (e.g., foreign outsourcing). This type of unemployment usually lasts longer than frictional unemployment because retraining, and sometimes relocation, is involved. Occasionally jobs in this category can just disappear overseas.
- Seasonal unemployment – This happens when the workforce is affected by the climate or time of year. Construction workers and agricultural workers aren’t needed as much during the winter season because of the inclement weather. On the other hand, retail workers experience an increase in hiring shortly before, and during, the holiday season, but can be laid off shortly thereafter.
- Surplus unemployment – This is caused by minimum wage laws and unions. When wages are set at a higher level, unemployment can often result. Why? To keep within the same payroll budget, the company must let go of some workers to pay the remaining workers a higher salary.
Other factors influencing the unemployment rate:
- Length of unemployment – Some studies indicate that an important factor influencing a workers decision to accept a new job is directly related to the length of the unemployment benefit they are receiving. Currently, in 2015, workers in most states are eligible for up to 26 weeks of benefits from the regular state-funded unemployment compensation program, although eight states provide fewer weeks and two provide more. No additional weeks of federal benefits are available in any state: the temporary Emergency Unemployment Compensation (EUC) program expired at the end of 2013, and no state currently qualifies to offer more weeks under the permanent Extended Benefits (EB) program. Studies suggest that additional weeks of benefits reduce the incentive of the unemployed to seek and accept less desirable jobs.
- Changes in GDP – Since hiring workers takes time, the improvement in the unemployment rate usually lags behind the improvement in the GDP.
WHERE RECRUITERS PLACE
Now back to the issue at hand, namely the recruiting, and placing, of professionals and those with college degrees.
If you take a look at the past few years of unemployment in the June “management, professional and related” types of worker category, you will find the following rates:
June 2015 2.9%
June 2014 3.5%
June 2013 4.2%
June 2012 4.4%
June 2011 4.7%
June 2010 4.9%
June 2009 5.0%
June 2008 2.7%
June 2007 2.3%
June 2006 2.4%
June 2005 2.6%
June 2004 2.9%
June 2003 3.5%
June 2002 3.3%
Here are the rates, during those same time periods, for “college-degreed” workers:
June 2015 2.5%
June 2014 3.3%
June 2013 3.9%
June 2012 4.1%
June 2011 4.4%
June 2010 4.4%
June 2009 4.7%
June 2008 2.4%
June 2007 2.0%
June 2006 2.1%
June 2005 2.3%
June 2004 2.7%
June 2003 3.1%
June 2002 3.0%
June’s 2016 rates for these two categories, 2.8% and 2.5%, respectively, are trending negatively this month, but are still close to the halcyon numbers we attained in the 2006, 2007 and part of 2008, time frames. But regardless, these unemployment numbers usually include a good number of job hoppers, job shoppers and rejects. We, on the other hand, are engaged by our client companies to find those candidates who are happy, well-appreciated, making good money and currently working and we entice them to move for even better opportunities—especially where new technologies are expanding. This will never change. And that is why, no matter the unemployment rate, we still need to market to find the best possible job orders and we still need to recruit to find the best possible candidates.
Below are the numbers for the over 25 year olds:
Less than H.S. diploma – Unemployment Rate
H.S. Grad; no college – Unemployment Rate
Some College; or AA/AS – Unemployment Rate
BS/BS + – Unemployment Rate
Management, Professional & Related – Unemployment Rate
For a total Management, Professional & Related workforce of…(,000)
Management, Business and Financial Operations – Unemployment Rate
Professional & Related – Unemployment Rate
Sales & Related – Unemployment Rate