Bob Marshall’s January 2017 BLS Analysis for Recruiters; 2/3/17
January BLS Preface
TBMG Coaching Updates and News
Bob Marshall – Coaching & Speaking Updates:
Mike Gionta’s free 8th Annual Recruiting Firm Owner Telesummit, March 21st to March 24th , 2017
I have been asked by Mike to present again at Mike Gionta’s free 8th Annual Recruiting Firm Owner Telesummit, Tuesday, March 21 through Friday, March 24.
The tentative title of my presentation will be: “The New Value Proposition: ETV = AEW + IECS – RPF.”
There’s no travel, no time away from the office and Mike is giving access to all the sessions FREE. Space is limited. More details to be announced at a later date.
Top Echelon, Tuesday Recruiter Coaching Series, Webinar, April 11th, 2017
My next Top Echelon webinar will be on Tuesday afternoon, April 11th, 2017, at 1pm, Eastern Time. This Recruiter Coaching Series will be for TE members. The exact title and description of this presentation, which will focus on Marketing Value, will be announced at a later date.
California Staffing Professionals Annual Conference, Kona Kai Club, San Diego, California, May 4-5, 2017
I will be presenting to the CSP Annual Conference on Thursday, May 4th, 2017 and Friday, May 5th, 2017 in San Diego, CA. I will conduct a Recruiter Retreat all day on Thursday—from 9:00am to 4:00pm. On Friday, I will conduct a 90 minute breakout session entitled, “Establishing Elegant Rapport through Elegant Communication.”
* Special San Diego Note: For those of you in the San Diego area, if you are interested in my in-office training (individual and desk-level) and are available for that training during May 1-12, please let me know for a special offer. Since I will be in San Diego for my CSP presentations, I will offer a discount on my usual fees plus NO charge for my airfare or other expenses. First come, first served, so contact me for specific details as soon as possible. Thanks!
National Association of Personnel Consultants (NAPS), 2017 Annual Conference, Denver, Colorado, September 20-22, 2017
I have been invited to present again at the NAPS Annual Conference in Denver Colorado sometime from September 20-22, 2017. The exact date, time, title and description of this presentation will be announced at a later date.
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.
“I’ve known, worked with, observed, analyzed and watched Bob’s evolution since 1980—over 30 years!! In my opinion, there is not a person in his space more valuable to you than Bob Marshall. As a student of our business, a trainer in our business and an overall consultant in our business, Bob has no peer in my opinion. I don’t believe there is another person you could work with that would bring to each of you, as well as your AE’s, a greater insight into the dynamics of our profession. This insight, coupled with his passion, has enabled me to rate him #1 in his field.”
—Alan Schonberg (legendary CEO, Management Recruiters International, February, 2013)
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.
5 Recruiting Red Flags – Don’t Hire These Candidates
Courtney Williams, January 24, 2017
As an entrepreneur, how do you hire the right employees? What in the interview process gives you clues to the type of employee the candidate will be? Hands down, the hardest job I have is hiring. The people you bring on to help execute your vision can, quite literally, make or break your company. So, what is an entrepreneur to do? To be fair, hiring is a complex process and can’t really be reduced to a simple checklist. But since it’s the beginning of the year and I’m in a list creating mood, here are 5 red flags to pay close attention to, that should make you proceed with caution!
- The Candidate Doesn’t Send a Thank You Note
I don’t hire people who don’t send a thank you note after an interview. It shows a lack of consideration and respect for the time and energy that my team and I put into vetting and interviewing that person. It might also indicate that the candidate does not really value the job and our company is not their first choice. Additionally, it speaks to the candidate’s social skills (or lack thereof) and suggests that the candidate might not be good at following up with and interacting with clients. Sending a thank you email (or note) is a nice gesture and candidates should do it if they want to work at our company. Sending a thank you note doesn’t mean you will get the job, but not sending one is the kiss of death.
- They Don’t Research the Company
Candidates need to do some research. If they really want the job, they should do a lot of research. At the bare minimum they should know what the company does, who some of their customers are and its major competitors. There is really no excuse for not having this information since the vast majority of companies today (ours included) have a website and write tons of blog posts about their business to support their SEO and social media strategies. Not doing research suggests that the potential hire is lazy. No one wants a lazy employee and certainly not a startup! And, if the person isn’t being lazy, it probably means that he or she doesn’t really care about the opportunity. You don’t want this type of employee on your team. You want to hire conscientious employees who will do the hard work to get the job done right, and you want to see these traits very early.
- They Tell You Their Dream Job Is To Do Something Else
Your dream job may be to become an astronaut or a real estate broker but don’t tell me that if you are looking for a job at a tech company in the education space! While we don’t expect that our employees will never leave our company, we do want to believe that they want to be here for the foreseeable future, or at the very least, they want to be in this industry. You want people who are motivated to do the job because it will help them achieve their end goals. If their end goals are too far removed from the current job that they are applying for, they are unlikely to really apply themselves to the job, and instead divert their efforts elsewhere to support their real long term objectives.
- They Have Had Six Jobs And They Are Only 25
I know, it’s 2017 and people are job hopping more than ever before. Most people will work for many more employers than people did in the 1950’s, but if you have a candidate who is 25 and has already had six jobs, that’s a red flag. It’s even more of a red flag if the candidate has held multiple jobs for less than one year. It indicates a lack of focus, poor decision-making skills and perhaps lack of competence. On its face, it also suggests that my company is not special and they are going to leave me too. So why should I bother to invest in that candidate? Work is work. It isn’t always fun, and you don’t want employees running at the earliest sign of difficulty. Employers want employees who can grind through the tough times and work through challenges and come out at the other end, all the better for it.
- They Never Explained Why They Wanted The Role
I want to make sure that the candidate is a good fit for the position, not just the company. I always ask why the candidate wants this role. I want them to be excited about education, technology and being in a startup environment, but if they don’t mention anything related to the job that they will be doing, I’m concerned. I want the employee to want the job that we’re hiring for. Over time, it’s okay for employees to move around within a company and find other opportunities, but at the outset, you want to make sure their personality and interests match up with the current job description. This ensures they will be happy with their position for a decent amount of time.
Hiring is tough. If it were easy, no one would ever quit or get fired. Finding the right employee for the job requires much more than just a great resume. Of the many things that go into the hiring process, the personal interview is one of the most important tools in your toolkit. It gives you clues to what the candidate will be like as an employee and helps you identify personality and character traits that will be an asset or a hindrance in doing the job. Remember, a company is only as good as its weakest employee. Hire slow, fire fast and keep an eye out for these red flags.
The Economy Grew Just 1.6% Last Year: Slowest Pace Since 2011
AP, January 27, 2017
The U.S. economy slumped to its slowest growth pace in 5 years, according to Commerce Department figures for 2016.
The nation’s gross domestic product grew at an annual rate of just 1.9% in the October-December period, a slowdown from 3.5% growth in the 3rd quarter.
For 2016, the economy grew 1.6%. It was the worst showing since 2011 and down from 2.6% growth in 2015.
The cutbacks in business investment along with efforts by companies to reduce an overhang of unwanted inventories were major reasons growth slowed in 2016.
Economists are forecasting a better performance in 2017, with many raising their forecasts to incorporate the potential impact of President Donald Trump’s ambitious stimulus program featuring tax cuts, deregulation and higher infrastructure spending.
Median Earnings of US Workers UP 2.9% in Q4
Daily News, January 24, 2017
Median weekly earnings of US full-time wage and salary workers rose 2.9% year over year in the 4th quarter to $849 (not seasonally adjusted), the US Bureau of Labor Statistics announced today.
Women who usually worked full time had median weekly earnings of $758, or 81.8% of the $927 median for men, according to the 4th quarter report. That percentage is unchanged from both the 2nd– and 3rd-quarter reports, which also found women who usually worked full time had median weekly that were 81.8% of the median for men.
For workers with a bachelor’s degree or higher, the median was $1,270 in the 4th quarter; for workers with only a high school diploma, the median was $698. Workers age 25 and older without a high school diploma had median weekly earnings of $519.
Among college graduates with advanced degrees — professional or master’s degree and above — the highest-earning 10% of male workers made $3,893 or more per week, compared with $2,547 or more for their female counterparts.
Among the major occupational groups, persons employed full time in management, professional and related occupations had the highest median weekly earnings of earnings of $1,443 for men and $1,042 for women. Men and women employed in service jobs earned the least at $608 and $497, respectively.
*(Special Note: the following article is for those of you who have heard my presentation on why candidates move, i.e., CLAMS)
*Lack of a CHALLENGE is Top Reason Professionals seek new jobs, survey finds
Daily News, January 24, 2017
The top reason professionals would hunt for a new job is to seek a more challenging position, while the quest for greater compensation comes in almost dead last as a reason to leave, according to a survey released today by executive search firm Korn Ferry International Inc.
Nearly three-quarters professionals surveyed, 73%, said that if they plan on being in the job market this year, it’s because they’re looking for a challenge. Trailing far behind, 9%, said they are looking because they either don’t like their company or their efforts aren’t being recognized, 5% said their compensation is too low, and 4% said they don’t like their boss.
“These results mirror study after study Korn Ferry has done that show money is not the key motivator for employees,” said Korn Ferry Senior Partner Kevin Cashman. “Professionals who have progressed in their careers have done so for a reason. They’re passionate about what they do and need to feel that they are being pushed professionally and continually learning new skills.”
The survey also found most professionals think 2017 is going to be a good year for extra compensation, as 75% of respondents reported they expect to get a bonus this year and 55% think it will be bigger than in 2016.
“While the survey shows compensation is not on the top of the list for personal drivers in the workplace, it is still critical to retention,” Cashman said. “Bonuses are a tangible way to reward professionals for a job well done, and should be considered in addition to promotions, development and a challenging work environment.”
The Korn Ferry survey was conducted in early January 2017 and garnered 1,958 responses.
Employees will be Easy to Lose, Hard to Hire this Year
Daily News, January 12, 2017
A recovering and changing job market last year gives way in 2017 to one in which job seekers have the advantage and millennials comprise the largest share of US workers, according to the Hiring Outlook report released today by The Execu|Search Group.
The report found 50% plan to stay at their current company for only 2 years or less. It also found half of employers hired temporary staff in 2016 to replace an employee who left a full-time position, and 62% of employers said they currently utilize temporary/contract employees.
“As the job market continues to evolve over the next year, engaging with talent will become even more critical to an organization’s success,” said Edward Fleischman, Chairman and CEO of The Execu|Search Group. “With this in mind, employers need to embrace transparency during the hiring process and in the workplace.”
Findings of the 2017 Hiring Outlook surveys include:
Employers are struggling to retain and hire top talent:
*The top 4 reasons employees are leaving are lack of advancement opportunities, lack of salary growth, negative work-life balance and poor corporate culture.
*61% of respondents reported they were interviewing for 2 or more roles during the interview process for their current position.
*50% of employees say that they are planning to stay at their current company for 2 years or less.
Employers are not providing the hiring experience expected by job candidates:
*75% of employer responses stated that their hiring process, from initial interview to offer, takes three-plus weeks, while the vast majority of professionals surveyed felt it should take two weeks at most.
*34% of working professionals said their interviewer could not convey the overall impact that their role has on the company’s goals.
*45% of working professionals do not feel that their interviewer made the effort to give them an introduction to the culture when they were interviewing for their current position.
Companies need to take a more active approach to culture, retention and leadership development
*76% of millennial respondents said that professional development opportunities are one of the most important elements of company culture, and 59% of professionals said that access to projects to help keep their skills up-to-date would keep them satisfied at their current company.
*42% of professionals feel that executive leadership does not contribute to a positive company culture.
*48% of all working professionals say that they do not believe that younger employees are encouraged to pursue leadership positions at their current companies.
*Working professionals ranked opportunities for professional development, emphasis on work-life balance, collaboration with team members, and access to leadership/management as the most important aspects of company culture.
The report’s findings came from surveys of more than 1,000 job seekers, working professionals and hiring decision makers that The Execu|Search Group partnered with in the past year.
The new ADP/Moody’s National Employment Report: Over 66% of all new job growth in January, 2017 came from Small and Mid-size Companies!
February 1, 2017
Private sector employment increased by 246,000 jobs from December 2016 to January 2017, (a 95,000 job increase from December’s ‘revised’ 151,000) according to the January 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.
(Note: The matched sample used to develop the ADP National Employment Report was derived from ADP payroll data, which represents 411,000 U.S. clients employing nearly 24,000,000 workers in the U.S. The December total of jobs added was revised down from 153,000 to 151,000.)
By Company Size
Small businesses: 62,000
1-19 employees 30,000
20-49 employees 31,000
Medium businesses: 102,000
50-499 employees 102,000
Large businesses: 83,000
500-999 employees 20,000
1,000+ employees 63,000
- Goods-producing 46,000
- Natural resources/mining 6,000
- Construction 25,000
- Manufacturing 15,000
- Service-providing 201,000
- Trade/transportation/utilities 63,000
- Information <-6,000>
- Financial activities 0
- Professional/business services 71,000
- Professional/technical services 8,000
- Management of companies/enterprises 5,000
- Administrative/support services 59,000
- Education/health services 47,000
- Health care/social assistance 49,000
- Education <-2,000>
- Leisure/hospitality 17,000
- Other services 9,000
Franchise Jobs 15,500
“The U.S. labor market is hitting on all cylinders and we saw small and midsized businesses perform exceptionally well,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Further analysis shows that services gains have rebounded from their tepid December pace, adding 201,000 jobs. The goods producers added 46,000 jobs, which is the strongest job growth that sector has seen in the last two years.”
Mark Zandi, chief economist of Moody’s Analytics, said, “2017 got off to a strong start in the job market. Job growth is solid across most industries and company sizes. Even the energy sector is adding to payrolls again.”
(The February 2017 ADP National Employment Report will be released at 8:15 a.m. ET on March 8, 2017.)
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.
January 2017 Small Business Report Highlights
Total Small Business Employment: 62,000
|●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 – November 2016
On January 10th, the U.S. Bureau of Labor Statistics (BLS) reported that the number of job openings was little changed at 5,500,000 on the last business day of November, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were also little changed at 5,200,000 and 5,000,000, respectively. Within separations, the quits rate was unchanged at 2.1% and the layoffs and discharges rate was also unchanged at 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.
On the last business day of November, there were 5,500,000 job openings, little changed from October. The job openings rate was 3.7% in November. The number of job openings was little changed for total private and increased for government (+48,000). Job openings increased in state and local government, excluding education (+32,000), and state and local government education (+17,000). The number of job openings was little changed in all 4 regions.
The number of hires was essentially unchanged at 5,200,000 in November. The hires rate was 3.6%. The number of hires was little changed for total private and for government. Hires increased in state and local government education (+19,000) but decreased in retail trade (-71,000). The hires rate was little changed in all 4 regions.
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, disability, and transfers to other locations of the same firm.
There were 5,000,000 total separations in November, little changed from October. The total separations rate in November was 3.5%. The number of total separations was little changed for total private and for government. Total separations were little changed in all industries and in all 4 regions.
The number of quits was little changed in November at 3,100,000. The quits rate was 2.1%. Over the month, the number of quits was little changed for total private and for government. Quits increased in construction (+32,000), wholesale trade (+20,000), and educational services (+9,000). The number of quits was little changed in all 4 regions.
There were 1,600,000 layoffs and discharges in November, essentially unchanged from October. The layoffs and discharges rate was unchanged at 1.1% in November. The number of layoffs and discharges was little changed for total private and for government. The layoffs and discharges levels were little changed in all industries and all 4 regions.
In November, the number of other separations edged down for total nonfarm (-47,000) and for total private (-43,000). ‘Other separations’ was little changed for government. Other separations decreased in retail trade (-27,000) and mining and logging (-3,000). The number of other separations decreased in the Midwest region (-28,000).
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 November, hires totaled 62,700,000 and separations totaled 60,300,000, yielding a net employment gain of 2,400,000. 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 December 2016 are scheduled to be released on Tuesday, February 7, 2017 at 10:00 am (EST).
As we recruiters know, that 5,500,000 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 5,500,000 published job openings now become a total of 27.500,000 published AND hidden job orders.
In January there were 7,635,000 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 7,635,000 unemployed, then they will keep reappearing each month as a BLS unemployment statistic—as they have. In the meantime, our recruitment marketplace flourishes!
Online Job Ads Increased 49,000 in January
February 1, 2017
*The small gain in January follows a December increase of 74,000
*Midwest, Northeast and South show gains, while the West shows small losses
*Note: January data incorporates updated seasonal adjustment factors
Online advertised vacancies increased 49,000 to 4,850,500 in January, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series, released today. The December Supply/Demand rate stands at 1.57 unemployed for each advertised vacancy with a total of 2,700,000 more unemployed workers than the number of advertised vacancies. The number of unemployed was approximately 7,500,000 in December.
“In recent months, the trend in the number of online job ads has been flat to slightly rising,” said Gad Levanon, Chief Economist, North America, at The Conference Board.
The Professional occupational category saw small losses in Management (-1.2), Healthcare Practitioners (-1.4), and gains in Computer/Math (23.0) and Architecture/Engineering (6.1). The Services/Production occupational category saw losses in Sales (-7.6) and gains in Office/Admin (18.8) and Transportation (10.1).
In January, 6 of the 10 largest online occupational categories posted increases.
Computer and mathematical science ads increased 23,000 to 530,000. The supply/demand rate lies at 0.24, i.e. over 4 advertised openings per unemployed job-seeker.
Architecture and engineering ads increased 6,100 to 147,800. The supply/demand rate lies at 0.55, i.e. over 1 advertised opening per unemployed job-seeker.
Sales and related ads decreased 7,600 to 465,400. The supply/demand rate for these occupations lies at 1.73, more than 1 unemployed job-seeker for every advertised available opening.
Office and administrative support ads increased 18,800 to 521,900. The supply/demand rate lies at 1.52, i.e. over 1 unemployed job-seeker for every advertised available opening.
Transportation ads increased 10,100 to 342,900. The supply/demand rate lies at 1.95, i.e. almost 2 unemployed job-seeker for every advertised available opening.
Construction ads increased 2,700 to 134,400. The supply/demand rate lies at 4.97, i.e. almost 5 unemployed job-seeker for every advertised available opening.
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 February 2017 Conference Board Help Wanted OnLine® (HWOL) Data Series will be released at 10:00 AM ET on Wednesday, March 8, 2017).
In January, 2017 the regular unemployment number rose one-tenth to 4.8%, and the broader U-6 measure rose to 9.4%, two-tenths less than twice as high as the regular unemployment figure.
The above 9.4% is referred to as the U-6 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 January U-6 numbers for the past 14 years:
January 2016 9.9%
January 2015 11.3%
January 2014 12.7%
January 2013 14.4%
January 2012 15.1%
January 2011 16.1%
January 2010 16.5%
January 2009 14.0%
January 2008 9.0%
January 2007 8.3%
January 2006 8.4%
January 2005 9.3%
January 2004 9.9%
January 2003 9.9%
The January 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 February 3rd, 2017, the BLS published the most recent unemployment rate for January 2017 of 4.8% (actually it is 4.780%, up by .064 from 4.716% in December, 2016.
The unemployment rate was determined by dividing the unemployed of 7,635,000 (—up from the month before by 106,000—since January, 2016 this number has decreased by 194,000) by the total civilian labor force of 159,716,000 (up by 76,000 from December, 2016). Since January 2016, our total civilian labor force has increased by 1,354,000 workers.
(The continuing ‘Strange BLS Math’ saga—the first downward correction!): Based on new BLS survey data, but for the first time since I have been monitoring these numbers (and it’s been years!) The BLS has DECREASED the total Civilian Noninstitutional Population—to 254,082,000. This is a DECREASE of 660,000 from last month’s increase of 202,000. In one year’s time, this population has increased by 1,685,000. The Civilian Noninstitutional Population has increased every month, except this month, by…)
|Down from December 2016||by||660,000|
|Up from November 2016||by||202,000|
|Up from October 2016||by||219,000|
|Up from September 2016||by||230,000|
|Up from August 2016||by||237,000|
|Up from July 2016||by||234,000|
|Up from June 2016||by||223,000|
|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 159,716,000 (up from December by 76,000).
Subtract the second number (‘civilian labor force’) from the first number (‘civilian noninstitutional population’) and you get 94,366,000 ‘Not in Labor Force’—down by 736,000* from last month’s 95,102,000. (*This is what happens when you decrease the Civilian Noninstitutional Population.) 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 .2% to 62.9%*. (*This is also what happens when you decrease the Civilian Noninstitutional Population. If this population had trended upwards, as it has for years, the Employment Participation Rate could have hit an historically low number.) As it is, 62.9% is .5% above the historically low rate of 62.4% recorded in September 2015—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 January was 2.3% (this rate was .1% above last month’s 2.2%). Or, you can look at it another way. We usually place people who have college degrees. That unemployment rate in January was 2.5% (this rate was the same as last month’s 2.5%).
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 January 27th, 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 price changes — increased at an annual rate of 1.9% in the fourth quarter of 2016 according to the “advance” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.5%.
The Bureau emphasized that the fourth-quarter advance estimate is based on source data that are incomplete or subject to further revision by the source agency.
The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, residential fixed investment, nonresidential fixed investment, and state and local government spending that were partly offset by negative contributions from exports and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased. The deceleration in real GDP in the fourth quarter reflected a downturn in exports, an acceleration in imports, a deceleration in PCE, and a downturn in federal government spending that were partly offset by an upturn in residential fixed investment, an acceleration in private inventory investment, an upturn in state and local government spending, and an acceleration in nonresidential fixed investment. 2016 GDP Real GDP increased 1.6% in 2016 (that is, from the 2015 annual level to the 2016 annual level), compared with an increase of 2.6% in 2015. The increase in real GDP in 2016 reflected positive contributions from PCE, residential fixed investment, state and local government spending, exports, and federal government spending that were partly offset by negative contributions from private inventory investment and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased. The deceleration in real GDP from 2015 to 2016 reflected a downturn in private inventory investment, a deceleration in PCE, a downturn in nonresidential fixed investment, and decelerations in residential fixed investment and in state and local government spending that were offset by a deceleration in imports and accelerations in federal government spending and in exports. Updates to GDP BEA releases 3 vintages of the current quarterly estimate for GDP: “Advance” estimates are released near the end of the first month following the end of the quarter and are based on source data that are incomplete or subject to further revision by the source agency; “second” and “third” estimates are released near the end of the second and third months, respectively, and are based on more detailed and more comprehensive data as they become available. Annual and comprehensive updates are typically released in late July. Annual updates generally cover at least the 3 most recent calendar years (and their associated quarters) and incorporate newly available major annual source data as well as some changes in methods and definitions to improve the accounts. Comprehensive (or benchmark) updates are carried out at about 5-year intervals and incorporate major periodic source data, as well as major conceptual improvements.
(The “second” estimate for the 4th Quarter 2016 GDP, based on more complete data, will be released on February 28th, 2017)
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 January “management, professional and related” types of worker category, you will find the following rates:
January 2016 2.3%
January 2015 2.9%
January 2014 3.1%
January 2013 3.9%
January 2012 4.3%
January 2011 4.7%
January 2010 5.0%
January 2009 4.1%
January 2008 2.2%
January 2007 2.0%
January 2006 2.1%
January 2005 2.4%
January 2004 3.0%
January 2003 3.2%
January 2002 3.1%
Here are the rates, during those same time periods, for “college-degreed” workers:
January 2016 2.5%
January 2015 2.8%
January 2014 3.3%
January 2013 3.8%
January 2012 4.2%
January 2011 4.2%
January 2010 4.8%
January 2009 3.9%
January 2008 2.1%
January 2007 2.1%
January 2006 2.1%
January 2005 2.4%
January 2004 2.9%
January 2003 3.0%
January 2002 2.9%
The January 2017 rates for these two categories, 2.3% and 2.5%, respectively, are low again this month and are still close to the halcyon numbers we attained in the 2005 to 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