Low Unemployment Rate Makes It a ‘Buyer’s Market’ for Job Candidates

The Bureau of Labor Statics (BLS) has released its April 2018 Employment Situation report, which highlights that the shrinking unemployment rate is making it a buyer’s market for job candidates, according to Nick Cromydas, Co-founder and CEO of Hunt Club, a tech-enabled recruiting service based in Chicago, Illinois.
The BLS reports that the unemployment rate has dropped from 4.1% to 3.9% over the last 6 months. Cromydas says, “This means there are currently more open positions than there are candidates to fill them. These tight labor market conditions have created a ‘buyer’s market’ that favors the candidate. Candidates no longer have to jump at the first opportunity they find. They can weigh their options to select the position that is best for them, personally, professionally, and, most importantly, financially.”

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Employment by Industry

According to the BLS, employment in professional and business services increased by 54,000 jobs in April 2018. Over the past 12 months, the industry has added 518,000 jobs.
Employment in manufacturing increased by 24,000, with most of the gain being in the durable goods. The healthcare industry also added 24,000 jobs in April and 305,000 jobs over the year—specifically in ambulatory healthcare services (+17,000) and hospitals (+8,000).
“With employment for healthcare occupations expected to grow 18% from 2016 to 2026, according to the Bureau of Labor Statistics, many healthcare employers are finding it more difficult to acquire and retain the workers they need,” says Will Eadie, Vice President of Sales and Strategy at WorkJam.
Eadie adds, “The nursing shortage is putting enormous pressure on hospitals. Retaining nurses is one of the chief challenges healthcare providers are being faced with as the labor market tightens. The employee turnover rate in healthcare is 20 percent, but the nurse turnover rate is closer to 25 percent.”
According to Eadie, the problem is that there aren’t enough new nurses entering the workforce and too many existing nurses reaching retirement age. There is also the issue of nurses switching employers every 1 or 2 years as workplace engagement declines.
Employee engagement continues to be a growing concern for employers, across a variety of industries, but getting candidates in the door seems to be even more difficult. “With so much of the country employed, the onus for sourcing talent has been taken off applicants and placed on recruiters and hiring managers,” says Cromydas.

Changes to Recruitment Strategies

In the face of these new challenges, employers need to make the changes to their recruiting strategies. Cromydas offers the following suggestions:

  • Increase focus on passive candidates. “With unemployment so low, the best candidates for an opening are less likely to be actively searching for a new position,” says Cromydas, adding, “They’re much more likely to be already happily employed but open to hearing about new opportunities. In order to reach these ‘passive candidates,’ recruiters can’t just offer a title bump. Rather, they need to demonstrate why a new position is tailored to the candidate, and how it fits within a longer-term career plan.”
  • Personalize your approach to better connect with candidates. Passive candidates will have far more opportunities to choose from. With more options, they will hold out for the right opportunity. Cromydas says, “Recruiters must set themselves apart by building personal relationships with candidates. Applying for a job shouldn’t feel like a transaction, and recruiters shouldn’t just be looking to simply fill the role. In order to attract world-class talent, recruiters must invest in the candidate experience up front.”
  • Be more career coach, less recruiter. While many candidates have goals, most don’t have a 5-year plan. As a result, recruiters need to become more like career coaches to earn a candidate’s trust, says Cromydas. Whether it’s making a lateral move to an early-stage company, taking a pay cut for more responsibility, or looking for a role in the “digital shift,” many career decisions require consultation with an expert who can point out why a new position is a stepping stone toward reaching his or her career goals.
  • Expedite trust. Cromydas says, “In this buyer’s market, candidates are simply going to ignore cold outreach. It’s imperative that recruiters build personal relationships as quickly as possible with passive candidates.” He adds, “Only once trust has been established can recruiters move towards hiring. One way to build trust is through referrals. Having someone the candidate knows make an introduction can go a long way in helping the hiring executive initiate a conversation.”

Companies that are looking to attract passive talent in this tight job market should approach recruiting with a long-term plan, suggests Cromydas. They should first build relationships with a pipeline of talented candidates, then consider each candidate’s needs before asking him or her to uproot his or her personal and professional lives for a career opportunity.

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