The unemployment rate declined to 4.5 percent in March, and total nonfarm payroll employment edged up by 98,000.
By now, we’re accustom to news updates that report a positive employment situation based on the declining monthly US unemployment rate. While there are many puts and takes behind these numbers (e.g., employment increased in professional and business services and in mining, while retail trade lost jobs), it’s generally great news that benefits many households.
Another common labor market indicator is the number of job openings. As of February, there were 5.7 million job openings; little changed from January, and little changed for total private and government openings. Taken in isolation and, with little month-over-month change, this number may be meaningless. Is 5.7 million good or bad?
What comes to mind when you read “there were 5.7 million job openings, as of this February, compared to 2.4 million job openings in February 2010”? Now, it starts to get interesting in the land of opportunity. So, let’s continue to build…
The Bureau of Labor Statistics publishes a monthly Vacancy Duration indicator for the average number of working days taken to fill vacant job positions, and it can be sliced in many ways: government vs. private sector, industry, region, size of establishment, etc. Fun stuff.
As of February, the Vacancy Duration indicator was 27.8 days. This compares to 2010 and 2016 annual averages of 18.1 and 28.1 days, respectively – and a historic high of 29.6 days in April 2016.
Those of you with IT or other postings for in-demand, hard-to-find skillsets that have been lingering for months would likely be thrilled with a 28-day fill rate. So, it’s no surprise that these aging job postings are clear examples of labor market tightness that doesn’t show any immediate signs of receding.
Why do I raise labor statistics when I’m not an economist, and what’s the connection with “Bad Hiring Decisions”?
When you’re a hiring manager who’s juggling many pressing demands for your time, it’s easy to relegate recruiting among the many administrative tasks that you shortcut or give “just enough attention”. This is especially common when your search drags on without the reward of even a few quality resumes among the stack. Add a tight labor market, and the situation worsens. Listen, I know…
This scenario often leads to pressure to rush a hire. Your boss questions why it’s taking so long to fill the vacancy, your project is behind schedule, the organization is planning a job freeze, HR is cancelling aging vacancies, etc., etc. You become desperate and quickly move to fill the position, perhaps settling for someone who’s an average fit, has solid technical skills but lacks certain…humm, je ne sais quoi...soft skills?, or was pleasant during the interview and seems to fit your culture. Sound familiar?
In my next post, we’ll explore the costs of a bad hire and things your organization can do to avoid them.
Donna Howell is a managing director with Anthem Minds, who enjoys delivering high-impact results to meet complex business challenges and performance objectives.
Anthem Minds is an innovative workforce solutions company that enables organizations to substantially improve their ability to hire, manage and optimize the skilled, top-quality talent that’s essential to meet the business demands of today – and tomorrow. Learn more at www.anthemminds.com.