As 2018 comes to a close, we’re able to look back on the job market this year and observe a remarkably strong year for businesses and workers. As of October, the unemployment rate remained at 3.7 from prior month. And across the whole year, the unemployment rate and number of unemployed individuals fell by 0.4 percentage point to and 449,000 respectively, according to U.S. Bureau of Labor Statistics (BLS).
The number of new job openings across industries also increased, with many major industries such as health care, manufacturing, and leisure and hospitality reporting strong growth. On average, job gains averaged roughly 218,000 over just the past three months.
To further understand the rhythm of this year’s labor market and what talent acquisition leaders might expect as we head into 2019, we reached out to recruitment process outsourcing experts, Patty Silbert and Cory Kruse, to get their insight on the coming year. With recruiting as a core business competency, RPOs are most in tune with job market conditions and are best positioned to navigate its waters.
How would you describe the job market this year based on your experience?
Both leaders observed the talent strain placed on organizations; with many organizations focused on growing, they found it difficult to fill new positions with qualified talent.
The growth of the labor market has created tightening issues on both the internal and external sides of talent, says Cory Kruse, President at Orion Novotus, an RPO organization specializing in mid-market businesses. For RPO organizations like Novotus, this tightening comes with a good side – it’s this sort of talent squeeze that has elevated the organizational awareness of the benefit of RPO and similar talent acquisition solutions.
This market tightening didn’t just affect white collar jobs – the markets for those in the hourly ranks and those knowledge workers were equally affected, explains Patty Silbert, President at Newton Talent, an RPO organization with expertise in creating sticky brands with a high touch approach.
“I think some of that is driven by a lot of technology changes. Organizations need to hire talent more focused on running automation and other technical skills that are needed,” Silbert adds.
Have hiring demands and challenges differed across industries and regions?
“There are some industries that are absolutely on fire,” says Kruse. Manufacturing, technology, distribution, health care, energy, and oil and gas are just a few of the industries with noticeably higher growth than others, he points out. Statistics from the BLS reinforce this observation – many of these industries grew by 20,000 or more jobs over this year alone.As for regional differences in hiring demands, rural hiring markets continue to struggle more than other markets for the same reasons observed in industries like health care: hiring people into remote markets that some would find undesirable as a place to call home is tough, observes Silbert.
Though not directly related to industry and regional differences, culture fit is another big challenge organizations are facing when it comes to hiring.
“Candidates are being more selective in where they choose to apply,” says Silbert. “They want more satisfaction from their job and want to feel like they’re working in a culture that is aligned to what they value.”
How is this job market going to change going into 2019?
Based on the current trends in the job market, both Kruse and Silbert agree that not much is going to change heading into 2019, with a growth trajectory continuing through at least Q3 of 2019.
“Certain sectors might slow down toward Q3 and Q4, and we might see a hiccup in early 2020,” explains Kruse. “But for the next three or four quarters, we’re definitely going to see continued growth.”
How are organizations adapting to the hiring environment?
Since the market has evolved so quickly – and will continue to evolve in a similar direction next year – many organizations are still lagging behind when it comes to adapting to the new hiring environment, particularly when it comes to taking advantage of new technology, observes Silbert.
“Quite often, organizations don’t have the right knowledgeable worker there to move them along in the tech continuum and to tell them ‘this is the way we should be using technology.’”
Technology concerns aren’t going to go away anytime soon, as artificial intelligence and automation become a larger part of the way organizations and RPO manage data and talent. Kruse doesn’t expect this influx of technology to “stabilize” in the market. This means that to truly adapt to the new hiring environment, organizations are going to need to invest ahead of the growth market, rather than react to the changes as they occur.
How is RPO positioned to excel in these labor market conditions?
One of RPO’s greatest strengths when it comes to succeeding in these labor market conditions is their agility, says Silbert.
“We can take these technology developments and incorporate them into our organization much more easily than a larger business. We’re not a 20,000-employee organization with multiple layers,” she explains. “It gives us the opportunity to implement and create greater adoption on these technologies.”
According to Kruse, RPO’s excellence in today’s labor market comes down to three traits: people, process, and technology.
Top RPOs have some of the best in the business delivering solutions to customers and these experts know what processes work, explains Kruse.
“We’re battle tested across multiple industries. We have the visibility and the legacy to show where we’ve made huge differences across several industries,” says Kruse.
“When a company hires an RPO, they’re not only getting expertise, but visibility across multiple platforms. It’s a collective expertise.”
To hear more about how RPOs are positioned to provide the strategic value and traditional know-how to guide organizations into the future of talent acquisition, jump over to the webinar “Outsourcing or Modern Necessity for Best-in-Class Hiring," presented by market intelligence company Aberdeen. During this webinar, you’ll hear about the key trends driving the best-in-class companies toward RPO, the best hiring practices they employ, and more on the rapidly evolving talent acquisition space.