Pulse Survey: Tight Labor Market Could Give Workers the Upper Hand
6 min. Read
Last Updated: 06/20/2018
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With the U.S. unemployment rate at 3.9 percent — the lowest it's been in nearly 18 years — many industries are struggling to fill positions. Jobs in blue collar industries like food service, manufacturing, landscaping, construction, agriculture, and more often go unfilled as employers struggle to find qualified candidates.
While fewer people out of work is a good thing, low unemployment can present challenges for companies seeking to hire — and for the economy overall. Perhaps attributable to a thinning applicant pool, the second annual Paychex Pulse of HR Survey found that nearly half (45 percent) of HR leaders see more unqualified candidates applying for high-level jobs than in the past. Applicants may be gambling that employers' needs for immediate productivity will overcome stated hiring requirements.
Top HR challenges include retaining talent
Commensurate with a tight labor market, the Pulse survey revealed that retaining talent is among the five top HR challenges for 2018:
- Keeping up with regulations (38 percent of respondents)
- Tracking employees' time (38 percent)
- Complying with regulations (35 percent)
- Offering competitive benefits (33 percent)
- Retaining talent (31 percent)
While businesses certainly need to make efforts to keep up and comply with regulations, they also need to consider the full employee life cycle, along with ways to empower and engage their workforce. That means providing a well-rounded working environment, an attractive benefits package, and career-building opportunities – all backed by user-friendly technology and self-service tools.
As Pamela Lacy, Paychex HR consultant, points out, “Employees today want to work for an employer who has developed a culture of inclusion and diversity, as well as one that offers ample opportunities for career advancement. Supplementing the human touch that is inherent to the HR function with tools and technologies that help to connect the employees to their work in a way they’ve become accustomed to in their personal lives can help HR professionals create an employee experience that rivals top competitors and ultimately improves overall employee engagement.”
Increasing demands for fair pay and HR policies
When considering current economic conditions, employers may find that they need to pay their workers more in order to keep them. For example, a tight labor market has given job candidates more power to negotiate their salaries. With such high stakes for top talent, Lacy says that “Staying in touch with the ever-changing needs of your workforce is mandatory in an increasingly competitive human capital landscape.”
Along with conversations about pay, positive dialogues about work environments have emerged, possibly as a result of the #MeToo movement. “Business leaders today are increasingly attentive to their HR policies and practices, and are laser-focused on creating and maintaining workplaces that are free from even the perception of harassment, discrimination, or pay inequality,” said Edwina Maxwell, Paychex human resources coach.
Analytics for data-driven employment strategies
The tight labor market encourages more HR leaders to analyze data on recruitment, hiring, and employee retention. Analytics provide an empirical basis for employment strategies: what works and what doesn't. The Paychex Pulse of HR survey found that HR leaders increasingly use analytics to understand how to communicate more efficiently with employees (up from 64 percent in 2017 to 77 percent in 2018).
Successful employee recruitment in this market requires that HR leaders employ ingenuity, flexibility, and generosity. Read more from the 2018 Paychex Pulse of HR Survey for more findings related to hiring and other hot-button HR topics.
About the Paychex Pulse of HR Survey
Data included in the 2018 Pulse of HR Survey was taken from an online survey, administered by Bredin, between April 13, 2018 and April 21, 2018. This survey polled 300 HR decision makers from U.S. companies with 50-500 employees.