A Discussion about Wage Growth

According to economic analysts, the job market (with its high demand for employees) should be pushing wages and compensation up by now. The unemployment rate is very low (4.3%) and some seem to believe we are at “full employment.” A reasonable conclusion would be that there is, or should be, a shortage of available employees. As a result and by application of the law of supply and demand, there should be evidence of higher wages and compensation, right? Not this time.

Under the current situation, the issue affecting wages and compensation is the skills-gap between what employers need and what the job seekers/employees offers. There are not enough job seekers/employees with the required skills to take the jobs being offered by employers – regardless of the pay. This will be a significant on-going problem.

In today’s economic environment, employers are not interested in hiring a job seeker/employee who will not be quickly contribute to the company’s bottom line. They need immediate impact. Any wage and compensation increases in the job market are likely taking place to lure experienced employees from one company to another.

How could this market dynamic affect a job search? As a job seeker, a pivotal element of your job search is to present yourself to an employer with the skills that will immediately provide a benefit. Identify your skills (including transferable skills) with accompanying accomplishments using those skills. When you do, you position yourself to possibly improve the monetary offer from the employer.

What Job Seekers Want in a New Opportunity

According to Business Insider and a recently released survey by Gallup Research, here are the top 5 things job seekers are looking for in their next job:

1. The opportunity to do what they do best – 60% of job seekers said being able to do what they do best was very important for them in their new role. They want a strong match between their skills and the requirements of the role.

2. Better work-life balance and personal well-being – 53% of job seekers said that a good work-life balance and a better well-being are very important to them. Work is important, but having an employer that understands work-life balance is important too.

3. Job stability and security – 51% of both millennials and Gen Xers are looking for stability and security in their roles. This would most certainly hold true for other job seekers regardless of tenure. Job seekers want to work for companies that they believe in, develop their skills and careers, and grow with the company.

4. Opportunity to work for a company with a brand or reputation – Working for a company with brand recognition and a good reputation are factors when job seekers look for a new job. Job seekers want to be proud of the companies that they work for. They want to work for companies that are aligned with their values.

5. Money – 41% of job seekers said that more money was important when they were considering a new opportunity. Although compensation was not the only driving motivation, it is important. As their skills and contribution grow, job seekers expect their salaries to grow too.

As an employer, understanding these motivations could help position your company and job opportunity to attract and retain new employees.

Click here to read the Gallup Research article.

Employment – Skills Gap

The number of job openings in April rose to the highest level seen since records were kept. There are now over 6 million job openings. Yet, there are still 6.9 million unemployed people. Now, it would seem logical that this problem would resolve itself, right? There are 6.9 million unemployed people and 6 million open jobs. Unfortunately, it’s not that easy.

Analysts suggest that about half of the 6 million unemployed (3 million) have the desire to work but lack the skills to fill open positions. This is a skills-gap problem. Employers do not need low skilled employees. Rather, our economy has evolved and the demand now is for skilled employees who can contribute immediately. These are employees with the right skills, education and experience. The pool of potential employees in the jobs market cannot fill the demand for these openings.

Compounding the problem, some employers have moved away from training employees due to the cost of training. They also fear losing those trained employees to another company who can offer better compensation, benefits, and opportunity. This is a big problem for businesses as they struggle to defend against other companies recruiting their trained employees.

May Jobs Report Reflects Continued Job Growth

The May jobs report indicated a gain of 138,000 new jobs in May. This pushed the unemployment rate down to 4.3%. Depending upon what source you choose to rely on (Bureau of Labor Statistics or ADP), the U.S. economy has added over 650,000 new jobs since the beginning of the year. This is a good news!

There are some analysts that suggest that the U.S. jobs market is at or nearing full employment. If so, the next development should be some upward movement in wages as companies compete for employees.