Tag Archives: Employment Market

By the Numbers: Q2 2016

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At this halfway point in 2016, we took a look at key data points from the second quarter. We found:

 

  • The Massachusetts unemployment rate dropped to 4.2 percent in both April and May, the lowest it’s been in 15 years.

 

  • Labor force participation rate in Massachusetts — defined as “the total number of residents 16 or older who worked or were unemployed and actively sought work in the last four weeks” remained at 65 percent.

 

  • The Massachusetts U-6 unemployment number, which counts those working part-time who would rather work full-time and those who have stopped looking for jobs, is 9.6 percent, according to the Bureau of Labor Statistics.

 

  • The national unemployment rate remained below 5 percent, the lowest it’s been since 2008.

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  • However, the pace of adding jobs to the economy has definitely slowed. The BLS announced that only 38,000 jobs were added to the national economy in May, compared with the more than 200,000 jobs that had been added on average each month since January 2013. (Some special factors, such as the Verizon strike, account for some of those jobs.)

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  • In its latest Beige Book report (based on readings from the 12 Fed regional banks that were collected before May 23), the Federal Reserve reported that while employment grew only modestly since its last report, “tight labor markets were widely reported” in most areas and that employers across the country were having a harder time finding workers to fill jobs. Wages were up modestly, especially in areas where workers were in high demand.

 

  • Massachusetts’ economy is the fourth best in the country, according to a recent report from WalletHub. The report uses data from 2013 until 2016 to compare states across three key metrics that include economic activity, economic health and innovation potential. Massachusetts ranked first among states with the largest percentage of fast-growing firms and the percentage of jobs in the high-tech industries. Massachusetts was 19th on the list of states with the lowest unemployment rate (4.4 percent) and ranked 15th in the nation in terms of GDP growth (2.3 percent).

 

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

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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.

Adapting to a Candidate-Driven Job Market

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This post was originally published in NEHRA’s April e-newsletter. 

 

New England-area employers and hiring managers are experiencing first-hand a shift to a candidate-driven job market. They’re finding that it’s become more difficult to land top talent and that candidates are increasingly in the driver’s seat.

 

This shift is a result of several market conditions that drive demand for skilled workers, including:

  • 4.8 percent – Massachusetts’ unemployment rate in March 2015
  • 10,500 jobs were added to the Massachusetts economy in March, about double the monthly average job growth over the past year
  • 2 percent of the U.S.’ eligible workforce is participating in the labor market; according to the Bureau of Labor Statistics, the labor participation rate in March was the highest it’s been since June 2010
  • There are now 5.1 million job openings in the U.S., an increase from 4.2 million in 2014 and a rise of more than 21 percent

 

This demand for highly skilled workers – across all industries – continues to rise and has become a central challenge for recruiters and hiring managers. Recruiters and hiring managers are becoming well aware that this candidate-driven market exists and they are responding.

 

Highly skilled workers have many job openings to choose from, and are ultimately receiving multiple job offers during a typical job search. Skills and experience in IT, professional services and healthcare continue to be among the highest sought after. For example, temporary contractors with IT skills and experience are seeing multiple offers for future projects or permanent positions before wrapping up projects they’re currently on.

 

Not only are skilled candidates seeing multiple opportunities and then fielding several offers, but compensation and benefits are also affected. Salaries across the U.S. have remained mostly stagnant, but for highly skilled IT, Project Management, and niche financial and healthcare professionals, it’s a completely different story. One banking client of ours in Boston hires several experienced consultants to facilitate cyclical financial reporting projects. According to him, “Recently, there are just fewer immediately available candidates with the specific skills [he] needs to hammer through these reports, and they are able to demand higher hourly rates simply because of supply and demand.”

 

Our clients are faced with a critical decision over how much budget to allocate for each new hire. If they allocate too little, they will lose candidates to other offers. Large tech companies like Google and Facebook are setting new standards for both compensation and benefits, forcing other companies to follow suit. A large social media and tech company just outside Boston recently offered select highly skilled software engineers salaries at three to five times the market average, and is increasing company-provided lunch from three days per week to five days per week starting in July this year. Employers are trying to be flexible and think creatively about how they attract talent.

 

Companies in the Boston and New England area have been forced to rethink how they go about getting work done, the type of candidates they end up hiring, and the process through which they hire. It seems obvious, but I’ll elaborate a bit. In today’s economic climate, where demand for skilled workers has steadily increased, companies going through organizational change, merger or acquisition, implementations, upgrades, growth or decline will face difficulty finding available talent that meets their exact need. The more prerequisites or more specific the skill-set is, the harder it is to find the perfect match.

 

Hiring managers feel the pressure of time to meet deadlines and manage through change, and more frequently than ever before, they are utilizing temporary or contingent workers to fulfill those needs. According to the BLS and Staffing Industry Analysts, temporary workers as a percentage of total employment is at an all-time high and trending upward. Some firms find that it is faster and more affordable to utilize a staffing firm to hire a temporary consultant than to post a job and find the perfect full-time employee.

 

Hiring managers who hire quickly win. With a talent pool on the decline and demand on the rise, those who shorten the time it takes to find and onboard candidates are winning the best available talent when they need it most. Many of our clients have elected to trust our screening and interviewing process, asking us to send our best available candidates, rather than requesting to see and screen resumes and then interview themselves. This can mean the difference between getting the best available candidate or the second or third round, and it saves our clients money and time toward deadlines and goals.

 

On another note, clients who are generally more flexible with required skills and experience are finding access to alternative talent pools more efficient and successful than waiting for the perfect candidate to turn up. Intertwined in our screening and interview process is a detailed and rigorous extraction of skills and experience not appearing on resumes. Another way to speed the vetting and hiring process up a bit is simply by using technology – like Skype or other video conferencing tools – to ease requirements for meeting in-person.

 

At PSG, we rely heavily on our ability to build strong relationships with clients where this process is a true collaboration, and we commonly coach and advise clients on effective search techniques. In today’s tight market, shortening identification and onboarding time, being more flexible with prerequisites and offering competitive wages and benefits are keeping our clients at a competitive advantage in this new candidate-driven market.

 

If you or your company would like to discuss hiring in a candidate-driven market, please feel free to reach me at nbrown@psgstaffing.com or 617-250-1000.

 

Nicholas Brown is  Director – IT, Finance & Accounting, Creative and HR Staffing Solutions at Professional Staffing Group

 

 

 

 

PSG’s Aaron Green Talks to NECN about Massachusetts Hiring Forecast

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PSG President Aaron Green was a guest on last night’s NECN Business show. Aaron was invited to be interviewed about the release of PSG’s most recent Quarterly Human Resources Survey. He spoke about the Massachusetts employment environment with NECN Business anchor John Daly and highlighted an increase in hiring and recruiting locally. PSG’s quarterly human resources survey details Massachusetts employment trends based on client survey results. In the survey PSG asks clients for their responses to questions about hiring and staffing, salary and compensation, concern over retention and recruiting talent and budgets for HR spending.

To request a copy of PSG’s survey results please contact your PSG representative or call us (at 617-250-1000) or email info@psgstaffing.com.

2010: A Look Back

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by Aaron Green

The beginning of 2010 was still a dark period for most Boston workplaces. Salaries and compensation packages were static, employers and employees were tasked with doing more with fewer resources and in general there was still a lot of fear and unknown regarding the future. Since then, the economy has slowly improved. The unemployment rate has fallen; employers in the state have added nearly 50,000 jobs; and the state is doing better than the rest of the nation in terms of unemployment and economic expansion rates.  However, we’re certainly not back to pre-recession levels as unemployment is still historically high and there are still approximately 120,000 fewer jobs than when the recession began. In fact, many Massachusetts residents don’t feel a recovery has begun. A survey that my firm, Professional Staffing Group, conducts each quarter with our HR clients echoes this mixed outlook. Looking back at the quarterly surveys and reports we’ve produced with our clients, as well as the daily interactions we have with hundreds of Boston HR departments, here’s a snapshot of how far we’ve come this year and where we are now:

The Boston economy showed incremental improvement in 2010
Our economy is certainly not robust and not yet back to pre-2008 levels, but employers are adapting. According to our survey, most kept HR expenditures at a static rate throughout the year. And while the BLS projects that overall employment will increase by 10 percent in the next 5 years, Boston-area employers are only mildly optimistic. For the past 6 months, the HR managers and employers we’ve surveyed have said they plan to add staff (8 times as many said they’d add as those who said they’d cut staff). Yet, 52 percent say they expect staffing levels to remain the same.

Employer purse strings are starting to loosen
Employers are starting to offer compensation increases after having shelved these for several months.  In our most recent survey, 82 percent of employers said they expect compensation to increase in the next 12 months, up from 77 percent who said they expected an increase in last quarter’s survey.  Sixty-seven percent of employers surveyed said they actually increased compensation during the past 12 months, up from 54 percent in our last quarter’s survey.

The labor market is becoming tighter for certain positions
 Although the US unemployment rate is 9.6 percent, the US unemployment rate for job seekers with a college degree drops to only 4.7 percent. If we look at rates in Massachusetts we see that unemployment rates are much lower. The overall Massachusetts unemployment rate at 8.1% is 1.5% less than the national average of 9.6%. I’m not aware of a measurement of the unemployment rate for college graduates in Massachusetts but given the 1.5% difference in the overall rate, it seems likely to be in the mid 3% range. Therefore employers seeking degreed candidates and employees with specific credentials and skills, e.g. professional or managerial skill sets, have an even narrower field of candidates to choose from. Our latest quarterly survey found that 42 percent of employers plan to add staff in the next three months and 73 percent of employers say that staffing levels are too low. In what I think is an effort to promote from within, our latest survey shows that five times the number of employers said they’ll increase internal training over the number who said they are reducing that expenditure.

HR departments and resources have been stripped down
One of the most popular areas in the workplace to see cuts during the great recession was the HR function, leaving many HR departments with too few staff and resources. Now that the economy has improved, many HR departments are in re-building mode. Short-staffed firms have difficulty recruiting, screening and hiring new employees as quickly as they need them and, as a result, are turning to outsourced or contract recruiters or are re-tasking HR employees with recruiting to the detriment of other duties.

Retention is still not a major concern for most employers
According to our survey results, about half of employers say retention is a minor problem; only 9 percent see it as a major problem and 34 percent say it’s not a problem at all. These results are consistent with the previous quarter’s survey findings.

My personal feeling is that more employers should be concerned with retention and take actions now that will prevent it. I base my opinion on three factors: 1) Surveys of employees show a high percentage of employees would consider another job 2) Employer are preparing to hire (see above, 42 percent of responding companies plan to add staff in the next six months) 3) There is limited downside to taking actions to prevent turnover.

Aaron Green is founder and president of Boston-based Professional Staffing Group and PSG Global Solutions. He is also the vice chairman of the American Staffing Association. He can be reached at Aaron.Green@psgstaffing.com or (617) 250-1000.