We’ve all heard that the U.S. unemployment rate is at its lowest level in over a decade. That’s good news, of course. But as employers, we also know that this is the kind of good news that makes our own jobs just that extra bit tougher.
It’s not just that competition for talent is fierce. We have to contend with a lot of other things, too: whether it’s the economic ups and downs of our respective industries, or the new technologies that are transforming the workplace, leading to demand for new skills while making others obsolete. And these changes cut across every industry, even if the impact isn’t always the same.
So how are employers preparing to face these challenges as we enter 2018? We surveyed 1,000 of them to find out. Let’s take a look at the results.
Get ready for a hiring boom
It turns out that employers are feeling pretty bullish.
How bullish? Well, 61% of respondents told us that they expect to hire more people in 2018 than they did in 2017. By contrast, just 10% of surveyed companies are planning to reduce their rate of hiring, while the rest plan to maintain current levels.
So if you think the hiring landscape is competitive now, just wait a few months.
What’s driving this? A lot of it is coming in response to current or projected business success. 56% of employers told us they are hiring to support business growth, while 31% are hiring for a specific skill and only 13% are replacing lost staff.
Which industries are doing the most (and least) hiring
Most companies in nearly every industry will see a jump in hiring in 2018, but some will be more aggressive than others.
The most active sectors for recruiting are architecture and engineering where 82% plan to hire, IT and telecom companies (75%) and professional services firms (71%).
At the other end of the spectrum we find that just 55% of retail companies and only 41% of educational organizations plan to recruit more people next year.
Comparatively low figures for the retail sector may evoke headlines about the “retail apocalypse.” However, at its Annual Global Retailing Conference this fall, Goldman Sachs reported that 76% of retail companies it surveyed had earnings that beat out their second quarter estimates. And given that retail occupations account for nearly 6% of employment in the US, that’s still a lot of hiring.
We also see differences across the regions, with one in particular racing ahead of the others: the Southwest. Here a full three quarters (75%) of companies are looking to hire more people in 2018.
The good news for recruiters here (at least in urban areas) is that the Southwest is attracting more and more people: Many of the fastest growing metros in the country are in the Southwest or West, according to the BLS. The West, Southeast, and Midwest by contrast have similar hiring expectations at 62%, 61% and 60%, respectively. The Northeast comes in last: here only 57% of companies anticipate hiring increases.
More than 40% of employers worry they won’t get the talent they need
So nearly everyone’s planning on doing more hiring. But when it comes to the question of filling those open roles, employers aren’t quite so bullish. In fact, 42% of those that we polled are concerned that they may fall short.
And while a lot of the conversation surrounding today’s talent shortages is focused on the need to find highly skilled workers, the truth is that this issue impacts hiring at all levels. In fact, 41% of companies say their entry-level positions are hardest to fill.
By contrast, 33% of companies are concerned about hiring middle management, 25% report challenges with senior management and 20% pointed to executive level positions as their most difficult hires.
So why are entry level hires so tough? Well, when it comes to higher level positions, then hiring managers usually have more flexibility to sweeten the pot with additional money, better perks and stronger incentives for more experienced workers.
With entry level workers, there just isn’t the same leeway. But the difficulty in attracting these candidates may be a sign that it’s time for companies to shift some of their incentives from experienced job seekers to the fresh talent that keeps businesses running.
Alternatively, it may be time to look at those job descriptions again. Are you really hiring for entry level jobs, or are you asking for one or two years’ experience? Frequently on Indeed we see employers listing jobs as “entry level” when in fact they are asking for one or two years’ experience.
If you can’t find that experience it may be time to switch your focus to core competencies and transferable skills, or consider internships or other indicators of effort.
Despite fears of the “retail apocalypse” firms in this sector are still hiring
When it comes to hiring limitations imposed by financial restrictions, employers in the transportation industry have the biggest concerns. Here, 40% of companies worry that they won’t have the budget to make the hires they need.
Little wonder: while truck drivers currently earn an average of $43,590 the driver shortage has been pushing wages up for some time now, placing a bigger financial burden on employers. In fact, compensation has risen by 8% to 12% a year according to Bob Costello, chief economist at the ATA. The ATA also reports that the median salary for a driver in a private fleet can be as high as $73,000.
It seems, then, that for the time being employers are going to have to dig deep to attract drivers.
This concern is also high in the healthcare industry, where staff shortages also lead to high salaries: here, 34% of companies share that worry.
In the retail sector, it’s a different picture. Here salaries tend to be lower, and we find that 75% of retail companies report that they will have the budget to make the necessary new hires. Once again, reports of the “retail apocalypse” may not reflect the more complex reality here.
For companies that need to make strong hires under budget constraints, non-monetary benefits like extra PTO, flexible hours and work from home options can tip the scales for job candidates.
The employer outlook on the economy is bright—for the most part
While most people are optimistic about their industry and business outlook, 27% have a general fear of economic slowdown. This fear is most pronounced in the booming Southwest, where about 36% of businesses are scared of an economic slowdown.
And professionals in certain industries are more concerned than others. For instance, the percentage of employers concerned about a slowdown jumps to 54% when we look at manufacturing companies, 52% when we look at finance companies and 50% when we look at travel and transportation companies.
Even with these looming fears, companies that are looking forward to a promising year of hiring should start taking steps to prepare for a more competitive landscape.
Looking ahead to 2018
As you get ready to vie for the candidates, it pays to be strategic about where you’re finding job seekers and how you’re catching the eye of top talent.
Start by looking at your existing people. Employee referrals are the most common source of new hires, with 73% of companies using this method to hire new employees. Job sites came in at a close 71%, with recruitment and staffing firms coming in at 51%.
Advertising still plays a strong role as well, with 42% of companies getting hires through digital ads and 38% from print ads.
And of course, Indeed has solutions that can provide assistance. Through our platform you can not only share job listings, but you can also browse resumes and get your brand in front of talented job seekers. Want to know more? Click here to learn how Indeed can help you get a head start in 2018’s race for top talent. Happy hiring!
Kevin Walker is Senior Director of Field Marketing at Indeed
Methodology: Censuswide surveyed over 1,000 currently employed HR leaders at US companies with 100 employees or more in October 2017.