The latest jobs numbers in the US point to a strengthening economy: 292,000 net jobs were added in December and unemployment remained at a low 5%.
This is a great sign for job seekers for the coming year. There are many job openings and employers are in need of candidates. But as candidates increasingly take the driver’s seat, will there be enough talent to meet rising demand from employers?
Last spring, Justin Wolfers, a professor of economics and public policy at the University of Michigan, tackled the looming talent shortage at Indeed Interactive. And his solution? Find ways to expand the talent supply. Wolfers used his insights as an economist to “take a big step back, get a lay of the land, draw a map of the mines, figure out where the gold may be, and perhaps where we should be mining a little harder.”
So where should we be mining? Here are the key insights that Wolfers highlighted in his talk:
A low unemployment rate doesn’t tell the whole story
The unemployment rate has been hovering around 5% for several months, meaning the overwhelming majority of people who want and are willing to work have jobs. But many of those people might not yet be in the right place. Some are still working part time but would like to work full time. Some are in jobs that are below their skill level.
“It used to be that if you saw someone who couldn’t find a job in the previous year, maybe it was a reasonable inference that they didn’t really have what it takes, and that resume would be shuffled to the bottom,” said Wolfers. “But today, it’s less of a useful signal. Maybe these folks are simply unlucky, rather than unable.”
Although we’ve undone much of the damage of the recession, the share of long-term unemployed remains well above its historical average. In the past 30 years, only 1 in 6 of the unemployed had been jobless for 6 months or more. Today that’s closer to 1 in 4. Wolfers encourages us to read the resumes of the long-term unemployed with a more sympathetic eye, because it means something different today than what it meant in the past. These previously overlooked candidates may be able to close some talent gaps.
The incarceration boom is contributing to the talent shortage
Since the late nineties, the incarceration rate has hovered around 1% of the US population—taking a large number of people out of the workforce. Even once those who have been incarcerated are released, finding work can be incredibly difficult. Specifically, this has affected the number of working men in America. As Wolfers pointed out in his talk, “Men with criminal records account for 34% of all non-working men between the ages of 25 and 54. And, African American men account for 25.4% of that number.”
That’s a significant number of people missing from the workforce and finding it difficult to re-enter. As talent becomes more scarce, employers may need to consider how to engage those with criminal records, finding ways of developing their talent.
You have to recruit the whole family
In general, most households now rely on two careers rather than one. This means that in the recruitment process, it is important to consider the entire family, not just one person.
This could mean considering spouses and partners for other positions within your organization or teaming up with other employers in your area to find work for a family that’s relocating. It also entails considering the balance between work and family that is very important to most candidates.
When thinking about the supply of workers, it’s crucial to understand how work-family balance can affect the size of the workforce. When work pushes families aside, we are discouraging parents from working with a fear of losing valued time with their families.
“If you look at public opinion surveys where you ask people ‘do your job demands interfere with family life?’, we actually see that men are more likely to complain about this,” commented Wolfers. “Work-family balance is not a gendered issue, it’s not a woman’s issue, it’s not a feminist issue, it’s a family and household issue.”
Indeed data shows an increasing number of job searches for “remote” or “flexible” work that could promote a better work-family balance. Wolfers suggests remote work is a pretty clear solution for attracting those already in the workforce and encouraging others to begin working in a more flexible environment.
Keep baby boomers connected
35% of the population is 55+ and as the baby boomer generation continues to age, this number is only going to rise. Traditionally, people’s engagement in the world of work trailed off as they aged, but 61% of people aged 55-64 are still working, and the numbers are only rising.
Even once people hit 65—the typical age of retirement—they are healthy, productive and actively engaged in the workforce. Today’s retirement looks less like endless days on the beach and more like a dynamic and fluid state of employment. “People may spend a few years in the labor force, a few years out, take on a little consulting, work part time, come back in, then spend more time with their grandkids,” says Wolfers.
With this enormous amount of untapped talent, employers should start seeking out these casual job seekers as a source of candidates for another couple of decades.
For a deeper economic perspective on hiring, read our report The Candidate-Driven Economy: Emerging Interests of Today’s Job Seeker.