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Even with talent in short supply, many US employers are seeking applicants for entry-level professional roles with several years of relevant work experience, disqualifying most fresh graduates, SHRM’s Roy Maurer reports:
A recent analysis of over 95,000 job postings by job-matching software firm TalentWorks revealed how difficult it can be for newly minted grads to find an entry-level job within their experience level. The research found that 61 percent of all full-time jobs seeking entry-level employees required at least three years or more of experience. Similarly, when labor market analytics company Burning Glass Technologies analyzed 25 million entry-level job postings from 2010 to 2016, it found an increase in the number of soft and hard skills being demanded. …
“We saw some employers increase experience requirements during the recession and decrease them during the recovery,” [Alicia Modestino, associate professor at Northeastern University School of Public Policy and Urban Affairs] said. “But another set of employers increased their requirements during the recession and have maintained them since then.” The organizations with those “sticky requirements” tend to be hiring for high-skilled occupations, which also require higher education and advanced degrees, she said.
Executives at recruiting and staffing firms tell Maurer that these experience requirements are often excessive and cause employers to discount candidates who would be successful in these roles. Skills learned at one job are not always immediately transferable to a new job, even in the same field, so the benefit employers gain from being able to train experienced recruits more quickly may not make up for them missing out on qualified entry-level talent without that experience. Besides, if every entry-level role required experience, where would newly-minted graduates work?
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Once the industrial base of the US, the Midwest has struggled in the high-tech era to capture the talent-driven growth enjoyed by coastal cities like Boston and San Francisco, but the region’s fortunes are changing fast. In the past year or so, a burgeoning Midwestern tech scene has begun attracting more attention from venture capitalists and Silicon Valley giants, with many local startups and big-company expansions focusing on the middle-skill roles for which the tech sector’s demand is insatiable, but that are still in short supply nationwide. These “mid-tech” or “new-collar” jobs are described as a 21st century analog to the factory jobs of the past—and as such, a promising path to revival for the industrial Midwest.
High-tech industries including major international firms have been making some big bets in the region: The Indian IT services and business process outsourcing giant Infosys is planning a sprawling campus near Indianapolis, which aims to create 3,000 new jobs within five years, while the Taiwanese multinational Foxconn Technology Group made a deal with the Wisconsin state government last year to build a display panel factory there, which will see the company invest as much as $10 billion and hire as many as 13,000 people. Several midwestern cities are on the list of finalists in the competition to host Amazon’s second headquarters, though Detroit, for example, didn’t make the cut, partly due to a lack of readily available talent.
Yet “mid-tech” companies and regional outposts of tech giants are just one side of the Midwest’s high-tech renaissance. Over the weekend, VentureBeat reporter Anna Hensel took a look at the growing community of AI and machine learning startups in the heartland:
“The real benefit of artificial intelligence is the application to traditional problems and products that the world needs, and the really successful companies have that domain knowledge that they can understand how to apply this technology,” [Chris Olsen, a partner at Columbus, Ohio VC firm Drive Capital,] told VentureBeat in a phone interview. “We see more of those domain experts in these industries [with] massive chunks of GDP that exist here in the Midwest.”
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The latest jobs numbers from the US Labor Department’s Bureau of Labor Statistics paint an encouraging picture of the state of the labor market, with new jobs being created at a steady clip and more people joining the workforce than leaving it. Total nonfarm employment increased by 213,000 last month, while the civilian labor force grew by 601,000, edging labor force participation up to 62.9 percent.
Unemployment increased from 3.8 to 4.0 percent as the number of unemployed persons increased by 499,000 to 6.6 million, but these changes reflected the large numbers of new job seekers, not people being thrown out of work. The bureau also revised its estimates for job growth upward for the previous two months, from 233,000 to 244,000 new jobs in May and from 159,000 to 175,000 in April.
Wage growth remains lower than in previous expansionary periods, with June’s earnings numbers showing a year-over-year increase of just 2.7 percent. Average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $26.98 last month. Coming after a long period of wage stagnation, these numbers are better than nothing for American workers, but still below economists’ expectations and barely enough to keep pace with inflation.
“Taken at face value,” Neil Irwin interprets at the New York Times, “it’s a sign that the hot job market is succeeding at pulling people off the sidelines and into the work force”:
It’s easy to imagine people who have become disengaged from the work force who, in this tightening job market, are more likely than they were a few years ago to see help wanted signs everywhere, or to have friends and acquaintances urge them to start working.
More US employers are abandoning unpaid internships and paying to fill the roles these interns would perform, the Wall Street Journal reported on Monday, as historically low unemployment rates and a scarcity of available workers forces them to compete more extensively for even entry-level talent.
Internships in general continue to rise in popularity, the Journal notes, pointing to a survey from the National Association of Colleges and Employers (NACE) showing that around 60 percent of college graduates in 2017 said they had an internship at some point while in school—a marked rise from just under 50 percent who said so a decade earlier. However, just 43 percent of internships were unpaid in 2017, compared to about half in 2012, NACE found, while the average hourly wage for interns increased 3.7 percent to $18.73 in 2018.
Although unpaid internships are often criticized for exploiting young people’s labor and shutting poor students out of career opportunities, employers are not paying interns merely out of the goodness of their hearts. The Journal hears from several companies that have converted their unpaid programs into paid ones, or turned down opportunities to add unpaid internships, in order to remain competitive in the market for college student and graduate talent. Young people have more options in today’s job market than they did during the recovery from the Great Recession, so employers who want to cultivate future employees through their internship programs may need to offer interns something more than college credit and experience.
In a sign of just how proactive employers need to be in the current US labor market, Kohl’s announced last week that it was already taking applications for seasonal positions for the coming autumn and winter, CNN Money reported:
Kohl’s is filling jobs at 300 of its 1,100 US stores for the back-to-school and holiday seasons. Additional jobs at stores and fulfillment centers will come open later in the year. It’s the earliest Kohl’s has ever started hiring seasonal workers, said Ryan Festerling, the store’s executive vice president of human resources.
Seasonal hiring has been increasingly competitive in the US over the past few years, with retailers hiring seasonal help earlier and having a hard time finding the numbers of workers they need. These large employers are hiring store staff by the thousands, but also lots of warehouse and fulfillment roles: a sign of the growing impact of e-commerce. Last year, some companies opted for alternative strategies like giving more hours to existing employees or hiring work-from-home customer service representatives, as means mitigating their need for extra on-site staff in the tight market.
The rapid growth of e-commerce, a strengthening economy, and a rebounding in consumer spending habits have caused a spike in demand in the US trucking industry over the past few years. At the same time as the need for their services is growing, however, the country is facing a shortage of truck drivers, Kirsten Korosec reports at Fortune, with an aging population of drivers exiting the workforce and fewer young Americans willing to sign up for long, lonely hours on the road:
The pain point is specific. The industry calls them “full-truckload, over-the-road nonlocal drivers,” jargon for drivers who haul goods over long distances, often days, if not weeks, before returning home. That lifestyle just isn’t attracting millennials and the incoming Gen Z cohort who place a greater emphasis on work/life balance.
The long-haul sector, which employs around 500,000, was in need of nearly 51,000 truck drivers by the end of 2017, the worst shortage it had ever seen. The lack of qualified drivers—some trucking companies have complained only 1% to 2% of applicants meet their requirements—has businesses competing for the same pool of workers.
The shortage is creating a ripple effect. Companies vying for qualified workers are offering higher pay and signing bonuses. The median pay for drivers in this category is $59,000, according to the ATA. Experienced drivers who work for private fleets can make as much as $86,000 a year.
The truck driver shortage is not new: At CEB, now Gartner, our State of the Labor Market report for the US late last year showed that heavy and tractor-trailer truck drivers had the highest demand of all occupations, followed by registered nurses. Demand for trucking skills has been growing rapidly, but with experienced drivers retiring and not being replaced by new talent, the segment of the labor market with this skill is very small. (CEB Recruiting Leadership Council members can read the full report here.)
Newly released data from the US Bureau of Labor Statistics show that the unemployment rate for people with disabilities declined last year to 9.2 percent, from 10.5 percent in 2016. While still considerably higher than the overall unemployment rate, which stood at 4.2 percent in 2017 and fell to an 18-year monthly low of 3.8 percent in May, the BLS figures indicate that people with disabilities are also experiencing the benefits of today’s tight labor market. “The decline reflects the trend in the overall labor force, which has been recovering since the end of the Great Recession,” BLS economist Janie-Lynn Kang tells Kathy Gurchiek at SHRM.
Overall, 18.7 percent of people with disabilities in the US were employed in 2017, the BLS data shows—up from 17.9 percent in 2016. Employed people with disabilities were more likely to be self-employed than those with no disability, the agency said, and were also more likely to work part-time (32 percent, compared with 17 percent for those with no disability). Overall, however, eight in ten US adults with disabilities are not in the labor force at all, while only 3 percent of these individuals said they wanted a job.
Concomitant with job growth among this segment of the population, the number of Americans seeking Social Security Disability Insurance benefits has been falling sharply, the New York Times reported last week: