THE JOB MARKET:
What It Is, What It Was & What It Shall Be
by Darrell W. Gurney, CPC, JCTC, RScP
A Permanent Success National Career Coaching & Search Partners
Reaching the end of a job interview, the Human Resources person asked the young Engineer fresh out of MIT . .
HR: "What starting salary were you looking for?"
Engineer: "In the neighborhood of $125,000 a year, depending on the benefits package."
HR: "Well, what would you say to a package of 5-weeks vacation, 14 paid holidays, full medical and dental, company-matching retirement fund to 50% of salary, and a company car leased every 2 years—say, a red Corvette?"
Engineer: "Wow! Are you kidding?"
HR: "Yeah, but you started it."
"What It Is" - An environment in which hiring companies hold the cards…and, as my father taught
me, the dealer chooses the game. Known as an "employer-driven" market, more good candidates now exist
than good jobs for them to fill. Companies are currently in the catbird seat in terms of negotiation
and, given recent history to the contrary, they are relishing it fully.
Recruiters (a.k.a. headhunters) are bearing the backlash of their former strength when, fortunate
enough to locate a hot individual wanting to change jobs in a candidate-hungry market, they commanded
top fees from client companies. Now, with fewer search assignments, recruiting professionals are
pressed to negotiate…and bend when necessary. And, as the above anecdote illustrates, the job seeker
also faces a stiffer game. Once a walk-on-water professional would be considering multiple offers
simultaneously, whereas now even a star player must appreciate, investigate, and milk every
opportunity that arises.
"What it Was" - A "candidate-driven" market where there were more good jobs available than good
people to fill them. For 5-7 years prior to the "economic corrections" of the past 12 months, hiring
companies, search firms, and job seekers operated very differently…when talent, much less exceptional
talent, was hard to attract, hire, and retain.
So, where do we go from here? What is the next evolution in the cycle of the market? You guessed
it-as with any cycle, there is a process of coming around full circle again. What will make the
coming upswing notable, however, is that the circle itself will expand…meaning we won't see another
downturn for a longer time than usual. What am I saying? Certain undeniable facts show that, beyond
this brief period of bottoming out, we will enjoy a candidate-driven market for at least the next 20
years!
I recently attended a presentation given by Michael R. Losey, SPHR, CAE, and former President of the
Society for Human Resources Management (SHRM) entitled "The Labor Shortage: Why and What to do About
It." This idea may challenge popular attitudes and assumptions about our current economic state,
which is specifically why I wrote this article. Despite appearances of short-term uncertainty, it is
heartening to take a long-term perspective-which shows that all is well…and getting better. Michael's
presentation inspired me because facts dissolve clouds of uncertainty, particularly when those facts
proclaim the abundance of U.S. employment opportunities well into the new millennium.
Here are the facts:
FACT 1:
U.S. workforce trends from 1980 to 1999 show a gradually decreasing level of unemployment, even during
recessions. Total unemployment reached 9.7% in '82, 7.4% in '92, and today, in the midst of the
current slowdown (exacerbated by our 911 emergency call), we're still at only 5.4% unemployment.
Today's figures may be skewed somewhat by several factors, but the trend is undeniable.
FACT 2:
Net additions (those coming in minus those leaving) to the U.S. workforce peaked at around 3% in the
early '70s and have dramatically declined ever since, to approximately 1.7% in the early '80s and
about 1.1% in the early '90s. The year 2000 saw roughly 1% net additions, as the slope continued
downward. Projections are that net additions in 2010 will be only .7%, and barely .5% in 2020.
FACT 3:
The percentage of the U.S. population which is currently employed (not the reverse of the unemployment
statistic) increased steadily from 1948 to 1978, going from 56% to nearly 60%, respectively. This
figure passed 62% in 1988 and stood at 64% in 1998. This is the highest ratio of all developed
countries, with Japan at just over 60%, the U.K. at nearly 57%, and Germany at 49%.
FACT 4:
The average monthly increase in jobs, although highest in recent history in 1997, with almost 280,000
jobs being created every month, was still at nearly 160,000 in 2000. One can make a point that this
average will be much lower in 2001 and 2002, but only for the correctional moment.
FACT 5:
The Bureau of Labor Statistics projects that in 2006 there will be only 141 million people in the
workforce to fill 151 million jobs.
(Source: "The Labor Shortage: Why and What to do About It", presentation by Michael R. Losey, SPHR,
CAE, Electronic Recruiting Exchange Conference, March 9, 2001, San Diego, California.)
Facts are facts, but what do they mean? Basically, following this short period of economic
adjustment, we are assured of enjoying the "candidate-driven" market that we've all come to know and
love for the past 5-7 years…well into the year 2020! The employment cards currently in the hands of
companies will be shuffled and handed over once again to candidates, meaning more opportunities to
consider and more negotiating power. Also, based on these demographic factors, the entire composition
of the workforce will change dramatically: the shortfall of workers will cause the utilization of
formerly untapped segments such as welfare to work, senior workers, and people with disabilities. We
will even need to institute heightened immigration as well as export jobs overseas to fill the coming
worker void.
Will such information pay this month's rent or your kid's tuition? No. But a positive outlook generally creates positive results. Being barraged daily by negative news of lay-offs and "economic indicators," it is important that we utilize every bit of substantiated facts to support a bright view of the future. A turnaround has to start somewhere. Why not let it be us?
About the Author:
Darrell Gurney
Why Shouldn't We Hire You?
Effective Personal Marketing