After weeks of rumblings about a possible recession, the U.S. employment numbers released in July were a complete “surprise,” according to CNN, and talent acquisition and recruitment professionals are taking note of the implications for attracting and retaining new talent.
The U.S. economy added 528,000 jobs in July, more than double estimates that the figure would be around 250,000. Meanwhile, the unemployment rate ticked down to 3.5% after holding at 3.6% for the previous four months and matched the half-century low last seen in February 2020, CNN also reported.
“This is the lowest it has been since 1969, a year when I was in middle school,” HR tech analyst Josh Bersin said on his blog and in an accompanying video.
Despite the rosy picture, the historically low unemployment figures are concerning to HR technology observers. Bersin, in fact, called this a “crisis.” Next month, he will likely delve deeper during his keynote address “The Disruption Never Stops: What’s New and What’s Ahead in the HR Tech Market” at the 2022 HR Tech Conference in Las Vegas.
“Why do I say this is a crisis? Because, quite simply, we cannot ‘manufacture more people’ in a flash,” he writes. He says employers can solve the global supply chain dilemma by building factories, buying cargo ships or scaling up distribution centers, but “people don’t work that way.”
He writes, “We need to educate them, train them, and coach them to perform at work. And as all the data now shows, when you ‘push’ people too hard, they just quit, check out or change careers.”
Talent acquisition and recruitment professionals are aware of the challenges of hiring, of course.
In a recent Tech Trends roundtable discussion, Tim Sackett, president of HRU Technical Resources, noted that only a small portion—less than a quarter—of the new jobs were white-collar positions, perhaps signaling a broad labor force shift toward more hands-on jobs than the economy has seen in the past decade.
“When you really dig into the data, only about 125,000 of those new jobs are in an office, in front of a computer, type jobs,” he said, adding that most new roles appeared to be in the service, manufacturing, construction and hospitality sectors.
“There’s just tons and tons and tons of jobs that are open,” he added.
Kyle Lagunas saw this in his former role as head of talent attraction, sourcing & insights for General Motors. In the same roundtable discussion, Lagunas said that recruiting and hiring technology workers—especially software engineers—remains a challenge because some CEOs and supervisors believe that code jockeys are more productive when they collaborate in offices instead of working remotely.
“I have to wonder how many of those open jobs are going to shift to being more fully remote because hybrid does not solve your problem. You still need someone who is willing to commute into an office,” he said, adding “Hybrid’s not the solution.”
The disconnect between employees seeking remote work options and managers/CEOs demanding workers return to the office is not going to end well for the latter group, warns Pete Lamson, CEO of ATS solution provider Employ. They have to realize that American workers today are thinking differently about work, work-life balance and their personal safety.
“We are seeing a new era for American workers that certainly was accelerated by changes that took place during COVID. I think we are maybe in the fourth inning where we know a lot has changed, but we do not yet know how the game is going to end,” he says, adding that some of the changes are “here to stay.”
Business leaders who wish for a return to the pre-2020 environment do so at their peril, according to Lemson.
The takeaway from the July 2022 job numbers for CEOs and CHROs? It’s a call to rethink how their policies and protocols affect their companies, writes Bersin. “Recruiting” your way out of a problem no longer works.
“We need what we call ‘systemic HR’ strategies and totally integrated HR operating models that bring together the four R’s: Recruit, Retain, Reskill and Redesign, all in one integrated way,” Bersin writes.
Ultimately, Lemson says that CEOs and CHROs need to reconsider compensation to attract and retain their best workers.
“The number one immediate driver for behavioral change in terms of job change,” he says, “has been and continues to be cash.”
To learn more about talent acquisition and the needs of recruiting professionals, join HR and tech colleagues at the 2022 HR Tech Conference, taking place Sept. 13-16 at Mandalay Bay in Las Vegas. Register here.