This economic cycle is really setting records. We’ve had almost 10 years of U.S. economic growth, the unemployment rate is at a 30-year low (it is expected to go lower), and every few days I hear someone in the administration bragging about how well the economy is performing.
There Are A Lot of Jobs, Just Not Enough Skills
Yes, there are a lot of jobs being created: more jobs than there are people in fact. As I discussed in an earlier article, employers are opening up many new positions to compete for this economic growth, and most of these are positions in software, service, sales, engineering, design, and other digitally-enabled roles. LinkedIn’s data shows that jobs like analytics, machine learning, cloud computing, and cyber security are 4-10X more scarce than the typical role, but data also shows that healthcare jobs and elder care are also in great demand.
Interestingly, most of these jobs demand softskills not just technical skills. A study just completed by Bloomberg and Workday finds that college graduates are not bringing enough technical or softskills to the job market (only 35% of employers feel grads are sufficiently ready) and four in ten are building remedial programs to try to fill this gap. So while there are a lot of jobs open, we are seeing an increasingly wide gap between the jobs being created and the skills and experiences in the workforce to fill them.
Automation Is Creating Jobs But Also Stress
More than two-thirds of the companies we interviewed in the 2018 Deloitte Human Capital Trends believe the pace of automation is increasing, and this creates stress in selecting technology, implementing it, and wondering if the tools you’re buying are good enough to compete with others. With an economy as hot as the one we have today, you don’t have a lot of room for error in buying the wrong tools, delaying your implementation, or selecting the wrong vendor. Expectations are sky-high, which of course makes all our jobs harder than ever.
And despite all the wonderful positive things technology can do, it has gotten away from us. There are now more than 100 different corporate learning vendors, at least 20 different tools for corporate collaboration, hundreds of new tools for recruitment, performance management, and employee engagement, and at least five major ERP vendors competing for payroll and core HR. All these are great companies, but selecting the right one and making sure the vendor doesn’t go out of business is a challenge.
Employees are overwhelmed
Added to all this, we can’t trust technology like we did before. These vendors are moving so fast (they see all this growth) they’re becoming sloppy in their own ways. Facebook just revealed that it gave away more data than it hard reported to congress, and it “unblocked” confidential information for almost a million people in messenger “by accident.” Google just revealed that hundreds of vendors have been reading your Gmail accounts (I use hosted Exchange), and despite their best efforts to “not be evil” I sometimes wonder what’s happening to my enormous cache of photos.
Traffic, Housing Costs, Infrastructure
I have always measured the state of the U.S. economy by simply measuring how much traffic there is on the San Francisco Bay Bridge. Well it has reached an epic level of frustration. I have to leave my house at 5 a.m. to catch an 8 a.m. flight from SFO now, and there seems to be traffic all day everywhere. Uber drivers tell me the same.
These are all nice problems to have of course, except for the fact that wages are barely increasing while the cost of living is now going up by 2-2.5% per year. Inflation is here (we just don’t notice it) and the gap between wages and costs is not closing.
Difficulty To Hire
Of course the biggest challenge employers find in this kind of economy is how hard it is to attract the right people. Recruiters are arming up with lots of new weapons to find people (I’ll be talking much more about this at the HR tech conferences coming later this year), but they’re also finding a 40% increase in time to hire. This is simply the result of candidates being more picky, and even trends like “job ghosting,” where job candidates just “disappear.”
What Does All This Mean?
Listen I’m not writing this article to be negative, but rather I think it’s important for us to realize that in this economic cycle, we have a whole new set of winning strategies as employers. We can’t fix what’s going on in Washington, we can’t necessarily fix the commute or the state of traffic – but we have to realize that our focus has to change. Here are a few of the massive trends I see in my world of HR, business leadership, and the HR tech market.
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