According to reports, the U.S. has a record number of job openings. There are 6 million jobs available and about 6.8 million people looking for jobs.
Although I am dubious about the numbers thrown around and seriously question how the government keeps track of the unemployed, underemployed and those who have given up looking for a new job, this is great news for both job seekers and employees.
For the last 10 years post-financial crisis, companies had the upper hand in the hiring process. There was an over abundance of people looking for jobs and corporations leveraged it to their advantage. Companies used the large supply of candidates to demand a high threshold of requirements. While they set the bar high, the companies did not pay-up for their skills and experience. Also, with so many people looking for a job, companies did not feel the pressure to raise the salaries of current employees nor did they feel the necessity to provide high premiums to lure job applicants.
Things are about to change quickly. With an improving economy and booming stock market, it looks like things are starting to shift in the job market.
In addition to the data of only a 3.8 % unemployment rate (which is under what is considered full employment) and 6 million jobs available, we also have anecdotal signs of a strong job market, in which there is shortage of qualified, talented candidates.
- Our recruiting division is receiving a steady flow of calls from hiring managers and human resource professionals seeking our recruiting assistance. They share the same story, "We've been searching for months without finding the right person. We made an offer, but the person accepted a counter from their firm and stayed with the company. Could you help us?"
- We have noticed that when searching résumé databases from the top job boards, there are precious few potential candidates that meet the strict criteria demanded by the companies.
- Possible candidates, when contacted on LinkedIn, are not chomping at the bit to leave. The prevailing mood is that if they were to move, it would have to be a big increase in base salary to make up for the risk associated with switching jobs.
I predict that the companies will be forced to change their behavior. They will no longer be able to make job applicants jump through endless hoops, possess unrealistic experiences and pay them considerably less than they are worth. The shortage of talent will push companies to change the way they recruit and hire. To remain competitive, they need the best and brightest. To procure these stars, companies will have to pay higher premiums than their competitors. They will also have to be more open-minded with respect to the backgrounds of applicants. Rather than demanding someone possess 30 ingredients on the job descriptions, they will have to look at the totality of the person and offer them the chance to learn on the job. Since there will be a battle between companies to attract and retain the best people, companies will have to start increasing the compensation of their employees to keep them from leaving.
This new paradigm is fast approaching and will leave the power in the hands of the employees. Compliance will be left with no other option than to (1) become more open-minded about candidates, (2) pay more money to attract employees and (3) compensate employees better to retain them.
