Q1 2016: a look at the numbers

The first quarter of 2016 is behind us and we took a look at key data points from this period to illustrate the state of our jobs market.

 

We found that:

 

 

  • For the first time in eight years, the national unemployment rate fell below 5 percent. Screen Shot 2016-03-23 at 6.05.56 PMThis is the lowest rate since 2008 and markedly improved from a high of 10 percent in 2009.

 

  • Although employers across the nation added 242,000 jobs to the U.S. economy in February, job growth in Massachusetts has slowed; revised numbers now show that job growth peaked in 2014 at 2.4 percent.

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  • After strong growth in 2015, the rate of wage increases has slowed so far in 2016 with a yearly growth in average hourly earnings at 2.2 percent, only slightly ahead of the inflation rate.

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  • The overall share of Americans in the labor force ticked up to 62.9 percent.

 

 

  • Temporary help employment showed little change from January to February (-0.3%), but it was 3.0% higher in February 2016 than in February 2015, according to seasonally adjusted data from the U.S. Bureau of Labor Statistics. Year-to-year staffing job growth averaged 3.8% per month over the past 12 months.

PSG’s Aaron Green Talks to NEHRA About Female Leadership in HR

PSG President Aaron Green spoke with NEHRA President Tracy Burns recently about women’s roles in the HR industry. For an industry that’s dominated by females, recent studies have pointed out that the top roles in HR are still held primarily by men.

Green and Burns discussed ways organizations can develop the careers of their female staff and prepare them for leadership roles. At PSG, Green says they’ve taken an individualized approach: “We’re still a relatively small company where I am personally involved in individual staff development and advancement to senior leadership.  While an individualized approach can work for small companies, larger organizations have a different challenge.  One of the keys to success for large organizations is to look beyond the overall number of gender diverse employees and examine the roles that are being filled by female employees to make sure those roles lead to management and leadership positions.”

Millennials are also influencing the way employers look at flexibility – a factor for keeping women in the workplace. Green believes that “People in general [regardless of age or gender] need flexibility” and wanting to keep your employees is the most motivating factor for creating a flexible and adaptable workplace.

 

See the full podcast here:

 

 

U.S. Unemployment Rate Falls Below 5 Percent

For the first time in eight years, the national unemployment rate fell below 5 percent.

 

In January, jobless claims fell to 4.9 percent, the lowest rate since 2008 and markedly improved from a high of 10 percent in 2009.

 

Although job growth is slowing, growth in wages is starting to pick up momentum. Average hourly earnings increased 2.5 percent in January compared to a year ago.

 

Locally, the unemployment rate in Massachusetts is 4.7 percent.

Massachusetts Unemployment Rate Holds at 4.7 percent

Massachusetts’ unemployment rate remained at 4.7 percent in December, according to a report today from the State’s Executive Office of Labor and Development. Massachusetts added 7,100 jobs in December for a total of 73,800 over the past year.

 

December’s job gains occurred in the Education and Health Services; Professional, Scientific, and Business Services; Information; Construction; Manufacturing; Financial Activities; and ‘Other Services’ sectors.

 

Nationally, the unemployment rate is 5 percent.

Predictions for Boston Hiring Trends in 2016

 

PSG President Aaron Green sees some interesting trends emerging around hiring job candidates in the Boston area this year.

 

“Hiring has become a painful experience,” Green says. “It’s painful for employers because there’s a shortage of qualified candidates for most open positions and because HR departments are stretched pretty thin.”

 

Green is referring to the low average unemployment rate in Massachusetts that has been below 5 percent since last April. As hiring picks up in certain sectors – such as technology and healthcare – organizations like hospitals and universities are looking for candidates with specific talents and skill sets, like workers who can support new initiatives in online courses.

 

At the same time, organizations are more mindful of having their HR department be the “right” size. That means ensuring there are enough resources to handle all the functions expected of HR, while staying flexible to adapt to changes in the economy – a lesson many learned the hard way during the last recession.

 

For many mid- and large-size companies this means considering outsourcing some parts of the recruiting process. PSG is seeing an uptick in clients using its Recruitment Process Outsourcing (RPO) services. In some cases, clients outsource some aspects of the recruiting process, such as sourcing and screening candidates, so their internal HR team can focus on more strategic functions, like interviewing and onboarding new hires.

 

Green says the hiring process is also painful for job seekers. “It’s almost like hazing,” he says. He believes this will change, starting in 2016.

 

“Economics, combined with the availability of information online, is forcing businesses to look at the candidate experience in new ways,” says Green.

 

Ratings systems that leverage digital data – such as the star system on Glassdoor and use of the short survey that quantifies a Net Promoter Score (NPS) – are driving change and helping the recruiting process evolve.

 

“PSG will be rolling out a new NPS for candidates applying for internal staff positions,” explains Green. “For many years we’ve conducted NPS surveys with candidates we meet and consider for placement with clients; and the data from those surveys has informed our recruiting and interviewing processes. Now we’re applying that experience, along with research we’re currently conducting – including feedback from candidates we hired as well as those we didn’t – to help us build a stronger candidate experience all-around.”

 

Retailers have long lived under the adage that “the customer is always right,” which comes from a desire to make sure customers have a positive experience with their brand. Now many employers are applying that methodology to the hiring experience. They’re treating candidates like customers and using new tactics to ensure that even candidates who don’t get hired come away with a positive experience of the process and, subsequently, the brand.

 

Another local hiring trend is how quickly compensation is changing. Green says that aggressive recruiting by private equity and venture funded companies is partly to blame. Unlike traditional businesses that are run for long-term profitability, PE and VC funded firms can offer outrageous compensation packages for short-term employment periods. This practice forces wages across the local economy to rise and compensation plans that were created even one year ago are now out of date. On the other end of the spectrum, increases in Massachusetts’ minimum wage  are also helping to accelerate the changes in compensation.

 

Another big trend in recruiting and hiring is matching candidates with an organization’s culture to increase the odds of making a successful hire. When it comes to culture fit, Google is championing the idea. In his book Work Rules! Insights from Inside Google That Will Transform How You Live and Lead, Google’s Head of People Operations Laszlo Bock explains that “culture underpins everything we do at Google.” Bock offers several tips for interviewing for culture fit, including knowing where to find the type of workers you’re looking for, using “work tests” in which candidates are gauged for their reactions in typical work situations, and testing candidates against the traits that are most highly valued at your organization.

 

In the future, Green foresees a hiring process that’s built around a candidate’s needs, rather than a company’s. While this likely won’t come to fruition in 2016, our use of digital data and the examples of hiring practices at companies like Google are showing that it’s possible.

 

In 2016, companies are better than ever at hiring, but it’s still a painful experience. Fortunately, a focus on improving the candidate experience and hiring for culture fit can help Boston organizations improve the process.Aaron Green 0904 22

 

2015 ‘By the Numbers’ – A Look at the Year in Review

As 2015 comes to a close, we pulled key data points to illustrate the state of our jobs market.

 

We found that:

 

 

 

  • The BLS released its Occupational Outlook handbook which predicts that jobs in healthcare and social assistance, professional and business services, leisure and hospitality, and construction will see growth over the next several years, while jobs in manufacturing and federal government will decrease.

 

  • Employers estimate wages will increase by an average of 3 percent in 2016, compared with the average annual increase of 2 percent that we’ve seen for the past five years, according to this Bloomberg article.

 

  • Private-industry employers in New England spend an average of $37.64 per hour worked on employee compensation, compared to the national average of $31.53 per hour worked. Wages and salaries accounted for 70.5 percent of New England employers’ total compensation costs, while benefits accounted for 29.5 percent.

 

  • Nearly half (49 percent) of U.S. employers continue to seek workers with skills in STEM (science, technology, engineering and math) and 55 percent said finding the right talent remains a challenge, according to a recent quarterly survey.

Massachusetts Unemployment Rate Rises Slightly

The Massachusetts unemployment rate rose slightly – to 4.7 percent in November from 4.6 percent the previous two months, according to the State Executive Office of Labor and Workforce Development.

 

According to the Bureau of Labor Statistics, the overall number of jobs in Massachusetts grew by 5,900 in November and has grown by 67,700 so far this year, exceeding the total number of new jobs added to the economy in all of 2014.

 

Nationally, the unemployment rate is 5 percent.

Massachusetts Unemployment Drops to 4.6 Percent in September

Massachusetts reported a mixed picture on jobs for September: the state unemployment rate dropped to 4.6 percent, despite losing 7,100 jobs.

 

According to the Massachusetts Executive Office of Labor and Workforce Development, Massachusetts’ unemployment rate dropped 0.1 percent between August and September. The current rate of 4.6 percent is down from 6 percent in September of 2014. Nationally, the unemployment rate is 5.1 percent.

 

Job losses were felt in the education and health services sector (estimated 4,700 jobs lost) and trade, transportation, and utilities (estimated 3,000 jobs lost). Construction lost a seasonally-adjusted 2,000 jobs and manufacturing businesses cut 1,700 jobs.

Massachusetts economy doing ‘quite well’ after winter slowdown

A recent article in the Boston Business Journal details great news for the local economy. Indicators such as Massachusetts’ real gross domestic product, unemployment rate, and the growth of wages and salaries are all strong and are also doing better than their corresponding national rates.

Read the full article here.

 

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Massachusetts Unemployment Rate Holds Steady in June

Massachusetts’ unemployment rate remained at 4.6 percent in June, its lowest point since before the recession began in 2007, according to the Massachusetts Office of Labor and Workforce Development. The state added 10,500 jobs last month, making June the tenth straight month of job gains for Massachusetts.

 

The biggest job growth reported was the professional, scientific, and business services sector, which added 5,200 jobs. About 30 percent of all jobs added in Massachusetts over the past year were in this sector, including jobs in the biotech industry.

 

Nationally, the unemployment rate is 5.5 percent.