As we hit the halfway mark of 2019, one thing remains consistent: unemployment numbers continue to hover just below 4%.
The Bureau of Labor Statistics (BLS) has released the June jobs report, which shows that the unemployment rate slightly increased from 3.6% in May to 3.7% this past month. In a press release, the BLS announced the newest data:
“Total nonfarm payroll employment increased by 224,000 in June. Employment growth has averaged 172,000 per month thus far this year, compared with an average monthly gain of 223,000 in 2018. In June, notable job gains occurred in professional and business services, in health care, and in transportation and warehousing.”
When broken down by sector, the June report shows that professional and business services added 51,000 jobs last month, following little employment change in May (+24,000). When comparing year over year trends, the BLS reports that “[e]mployment growth in the industry has averaged 35,000 per month in the first half of 2019, compared with an average monthly gain of 47,000 in 2018.”
Employment in the healthcare industry increased by 35,000 over the month and by 403,000 over the past 12 months. The BLS reports that job growth occurred mostly in ambulatory healthcare services (+19,000) and hospitals (+11,000), for the month of June.
The transportation and warehousing industry added 24,000 jobs over the month and 158,000 over the past 12 months. The most job gains occurred among couriers and messengers (+7,000) and in air transportation (+3,000) last month.
Construction employment continued to trend up in June (+21,000), in line with its average monthly gain over the prior 12 months, while manufacturing employment edged up (+17,000) last month, following 4 months of little change, finds the BLS.
“So far this year, job growth in the [construction] industry has averaged 8,000 per month, compared with an average of 22,000 per month in 2018,” reports the BLS. “In June, employment rose in computer and electronic products (+7,000) and in plastics and rubber products (+4,000).”
Small Business Hiring Slows
The June report doesn’t reflect drastic changes by any means, and this is on par with how small businesses are being impacted by the tight labor market. Fortunately, the Paychex | IHS Markit Small Business Employment Watch for June provides more insight on this area.
“The national jobs index fell 0.45 percent from the previous month to 98.32 in June,” finds the Paychex data. “Conversely, with a three-month annualized growth rate near three percent, hourly earnings growth during the past quarter is the strongest since 2017. Hourly earnings growth rose to 2.65 percent ($0.70) in June, while weekly earnings growth fell to 2.02 percent due to a continued decrease in hours worked from a year ago.”
“The two-year long, gradual slowing of small business job growth took on a more rapid pace in June with the index declining to 98.32,” says James Diffley, Chief Regional Economist at IHS Markit—in a press release announcing the findings.
“The jobs index is still reflective of employment growth, though at a slower pace than recent years,” says Martin Mucci, Paychex President and CEO. “With hourly earnings growth increasing, it appears the challenging hiring environment is finally starting to push wage growth higher for small business workers.”
Experts Weigh in
For many hiring and HR professionals, this data is nothing new. With unemployment numbers consistently being so low, we’re in a candidate-driven market, which means every talent acquisition strategy should be used in order to attract top talent to your company.
Rebecca Henderson, CEO of global human capital solutions provider Randstad Sourceright, provides us with her insights: “Despite the strongest labor market in decades, unemployment inching slightly upwards suggests consumer confidence could be changing, so now is the time for businesses to more seriously explore leveraging more flexible workforce options. Investing more in temporary or gig workers can help businesses prepare for greater economic changes through the rest of the year,” she says.
“This is also the time to be focused on reskilling full-time workers to handle a wider range of tasks to help fill roles from within,” Henderson adds.
When it comes to reskilling your workforce, one area to focus on is technology-based training and if you’re going to train your workers on how to use technology, you should also be using technology to hire new talent.
“While the labor market is great for employees, it means businesses need to revamp their approach to hiring in order to compete for top talent,” says Irina Novoselsky, CEO of CareerBuilder—in an e-mail to HR Daily Advisor. “Finding great talent quickly is a critical pain point.”
Novoselsky suggests that employers should get creative and smart about how they are finding new, and sometimes unexpected, talent and that includes using technology.
“AI is enabling us to find new solutions to the talent shortage in a way that’s faster and more effective than ever before,” says Novoselsky. “Companies can navigate the tight labor market by taking a unique approach to finding talent in surprising places that is only possible because of new data-driven AI solutions.”
Who knows when this tight labor market will loosen up? But one thing remains clear: employers continue to have difficulty hiring skilled talent to fill vacant positions. By taking Henderson and Novoselsky’s suggestions into consideration, you’ll be one step closer to filling your talent needs.