The Low-Skilled Workforce Can No Longer be Taken for Granted

The stock market whipsaws back and forth between negative and positive territory. Apple announces a major cut in its projected sales while Ford Motor Co. announces plant closures. China’s once red-hot economy continues to slow. Meanwhile, the trade war between that country and the U.S. continues to grind on as a prolonged federal government shutdown throws even more uncertainty into the mix.

It seemed like the dreaded “R word”–recession–might possibly become a reality in 2019.

Then came the most-recent jobs report from the Labor Dept.: 312,000 jobs were created in Dec., compared to economists’ projections of 180,000.

“It’s no secret that we’re living in the age of the employee, but this fact was resoundingly confirmed by last week’s jobs report,” says Andee Harris, president of YouEarnedIt/High Ground, an Austin-based HCM firm. “Employees are in a unique position of control in today’s labor market. If they’re unhappy with their current role or company, there’s no need for them to sit around and remain unfulfilled and dissatisfied.”

In other words, all those things your organization was doing to lure and retain talent last year? Best to keep at it.

“We’re practically at full employment,” says Micah Rowland, labor expert and COO of Fountain, a hiring/recruiting platform for hourly workers.

The most-recent jobs data, including the Dec. jobs report, also shows some surprising areas of strength, particularly in retail, he says.

“The narrative was that Amazon is taking over retail,” says Rowland. “But if you look at the industry over the past year, you’ll see that it added a bunch of jobs while wage growth was hitting its strongest levels since the financial crisis.”

Retail jobs grew by a total of 92,000 in 2018, after shedding 29,000 jobs during the prior year, he says. Indeed, Target just reported its strongest full year of sales growth in 13 years, while sales at Costco grew by 7 percent over the recent holiday season, the Wall Street Journal reports.

However, new retail jobs often look a bit different than in the past, says Rowland. Walmart and others are adapting to the Amazon challenge by letting customers order online and then pick up their purchases at stores the very same day.

“The retail supply chain has evolved, so now it’s not just a choice between ordering from Amazon or going to a local store,” says Rowland. The growth in same-day delivery has led to more jobs in areas such as logistics and supply while traditional retail jobs–such as cashier–continue to be automated, he says.

The bad news for retailers is that they’re competing with the restaurant and hospitality industry for the same relatively limited supply of candidates–folks with a high-school degree or less, says Rowland. Restaurants, for example, desperately need reliable drivers as they expand their delivery options. In the past, this group of workers tended to be shut out of economic recoveries. Many ended up so discouraged that they left the workforce entirely, he says. But more recently, job growth and rising wages are prompting more of them to rejoin the labor force.

“People at the bottom level of the skills scale are suddenly getting more traction in the labor market,” says Rowland.

This means that they–not employers–are now in the driver’s seat and recruiters need to move quickly to capture their interest and hire them, he says.

“These folks typically apply to multiple positions in a day,” says Rowland. “They’ll respond to the first organization to get back to them.”

Companies with a highly automated, mobile-first recruitment process tend to do well with these candidates, he says.

“If they have to wait for a human to email them back and schedule a phone interview, they’re off to the next thing,” says Rowland.

Andrew R. McIlvaine
Andrew R. McIlvaine is former senior editor with Human Resource Executive®.