2018 Job Forecast: Cloudy with a Chance of Heavy Compensation
Headed into the New Year, Utah’s job market remains one of the best in the country, according to the Utah Department of Workforce Services. It reported nonfarm payroll employment for October 2017 grew by an estimated 2.7 percent over the past 12 months, adding 39,400 jobs to the economy. According to the department, since 2014, the state consistently has experienced month-over-month job growth of more than 3 percent.
The unemployment rates for Salt Lake City, Ogden‑Clearfield and Provo-Orem consistently have ranked as among the lowest in the country for many months.
That’s really good news… for job seekers. For employers, however, these rates underscore a dramatic shortage in the candidate pool across most industries. Labor shortages in agriculture, child care, construction, education, manufacturing and technology are well-reported. These shortages will drive up the state’s average annual wage rate, which industry analysts project will increase by 5 percent in 2018.
Besides rising wages, a more daunting threat looms, and it is one that stands to impact employers’ business growth: Hyper-aggressive competition to hire the best talent, where poaching qualified workers is fast becoming a bona fide recruiting tactic for some employers.
Recent news stories have related instances among school districts where employees quit and began a new job two business days later, putting their former districts and schools in a very difficult shorthanded position. In these cases, employees had no hesitation with a swift and decisive job transition when an aggressive employer approached them.
To be clear, this is not merely an issue of paying candidates more or offering better compensation packages. In a job market driven by dramatic labor shortages, offering candidates higher wages and better benefits is a given.
Competing against aggressive employers also extends to an organization’s responsiveness during the interview and job offer stage. Some organizations have a multi-week interview process that is largely driven by their corporate culture.
One of the benefits of a longer interview process is properly vetting candidates’ experience and cultural fit to avoid making a bad hire. The problem is, many candidates are in the job market less than a week, and a lengthy interview process costs those organizations the top talent, who move onto employers that close the process in a handful of days and sometimes as little as 24 hours.
So are aggressive employers taking more risks with candidates by moving more quickly through their hiring process?
Some may. But sophisticated employers have modified their approach to hiring and are being more proactive through two primary ways. First, they have clearly defined the exact skill set, experience and educational background they need from candidates, and—equally important—they’ve identified the areas where they are willing to train candidates. In other words, their evaluation criteria is more scalable to accommodate a wide range of candidates, including ones that may not be an exact fit for the job description but have the necessary skills. In these cases, these employers understand and have committed to a professional development regimen for the right-skilled candidates.
Second, these employers have the proper intelligence about what the market commands in compensation for given positions in their respective industry. This information helps overcome any internal preconceived notions about what candidates should be paid versus what he or she will get paid in a competitive market.
This intelligence is critical because the most likely hiring outcome for organizations in an industry with labor shortages is that they, too, will have to be aggressive. They will need a clear understanding of what type of compensation will be required to compel candidates to make a transition.
For these reasons, it’s more important than ever for employers to make expert talent supply chain management part of their hiring process to compete for the best employees to win in 2018.
Susan Hornbuckle is the Utah territory vice president for Kelly Services, a global leader in providing workforce solutions. She oversees the staffing and business solutions operations for Kelly throughout the state, with a focus on staffing for accounting and finance, administrative, aerospace and defense, education, engineering, information technology, light industrial and manufacturing, and more.