As 2016 rolls in, it’s a time to take stock and review the labor market, jobs and where the employment trends will be focused. We continue to see slow growth with an average of 100,000 jobs created monthly.
The Great News: it’s a strong job market. The strongest in at least a decade. The Labor Department predicts that all job losses from The Great Recession will be fully recovered by 2020 and that the labor force will return to full employment with a 4-5% unemployment rate. This is coupled with an average wage increase of at least 2.5 to 2.8 percent. Until this point, jobs have increased but wages have remained stagnant. Employees are finally reaping the benefits after a largely employer based recovery.
The fastest growing jobs are still in IT, healthcare and financial services. As baby boomers age out of the job market, those skills that service and aging demographic will continue to grow.
Of course, social media will continue to drive recruitment, as the market tightens for qualified candidates, firms will rely more on passive recruitment through referral bonuses, Linked-In and Facebook. The gig economy will play a bigger role in employment, offset by the rise of freelancing and more effective technology. In fact, by 2020 40% of the employment population will be in a gig role as evidenced by the over 1 million Uber drivers.
Other issues facing employment including the influx of Generation Z graduates, the change from a 40 hour work week to a more flexible 47 hour work week outside of regular hours and with the rise of telecommuting, co-working spaces, globalization and new technology tools, an increased flexibility. Companies are also getting ready for the next “baby boom” when 80 million millennials have children.
This is the time to find a new job or leverage your current position and capitalize on the upcoming labor shortage. Applicants and employees are in the driver’s seat. Now is the time to google yourself, clean up your on-line presence and develop your personal brand.
The So-So news: All this positive, albeit slow employment growth was another sign of the solid economy and fed the first Federal Reserve interest rate rise in a decade. There is optimism that tightening labor market conditions with a jobless rate almost consistent with full employment, and strong domestic demand will put some pressure on wages. However, the interest rate increase will make borrowing more expensive and may limit investment in the capital improvements that drive hiring.
The Bad News: There’s a trifecta of costs that could severely limit the hiring at the all-important small business level. The Affordable Care Act Employer Mandate, the $15/hour minimum wage fight and a NYS regulatory environment that is ranked 41 in the nation could all profoundly affect job creation within small businesses.
The Take-Away: For the first time in over a decade, the employee is firmly driving the job market, employment trends and hiring. As the war for talent increase, companies must continue to drive their brand and create a flexible work environment that recruits talent while retaining staff.