Unemployment Rate Drops To 3.9% – Hottest War For Talent We’ve Seen in 50 Years
Today the US unemployment rate dropped to 3.9%. I cannot overstate how important this is as we consider recruitment, training, and HR strategies. The work we do in recruiting, employment brand, culture, engagement, rewards, and well-being is going to be even more critical in this new “war for talent.” (Mean “time to hire” according to BLS is 31 days, higher than it was in 2001). And skills needs are changing faster than ever. Not also that wage growth at 2.9% is now more than two times greater than growth in productivity.
There are lots of implications to this. Here in San Francisco we are struggling with skyrocketing rents, traffic, and homelessness. The Wall Street Journal just reported that in many small cities, where people have migrated away (to cities), employers are now paying people to relocate for jobs. (I remember this being true in the late 1970s when I graduated from college.)
Consider the data below (from the Wall Street Journal). In every case the orange employment curve is pulling away from the population curve. And this is likely to get worse: the US birth rate is below replacement (the US Fertility rate is around 1.9). This means that without a significant increase in immigration (which is clearly also a political issue), we are going to find it even harder to hire people.
Fig 1: Us Employment Vs. Population by City Size (WSJ Published April 30, 2018)
As we discuss in the 2018 Deloitte Human Capital Trends, there are many solutions to this problem. One is to take advantage of what we call the “Longevity Dividend,” leveraging the skills, abilities, and energy of older workers (like myself). The baby boomers are not all retiring and we can leverage the “tenured workforce” to help this economy grow.
This economic trend gives us much more to talk about. I’ll be discussing this topic in various events and speeches in the coming months.