Increasing optimism in the U.S. economy has translated into a heightened confidence in regards to the still-shaky job market, a recent survey suggests.
One in four Americans believe now is a “good time” to find a quality job in the U.S., officials at Gallup say, citing a poll based on telephone interviews conducted early last month with a random sampling of over 2,000 adults.
While that figure is certainly not a homerun figure, it is far better than the 10 percent reported at the same time in 2011 and the 17 percent reported last summer.
David Lewis, president and founder of OperationsInc, a human resources firm in Norwalk, Conn., finds the steady increase promising because it likely suggests that more of the currently employed are putting their resumes out to search for better jobs, which, in turn, will trigger some badly needed movement in the job market.
“This is a good sign that we are moving closer to what was the old normal in 2007,” Lewis tells Leo Rommel of Industry Today. “It shows that the job market is becoming a place driven more by the movement of people who are gainfully employed rather than growth in existing companies, which leads to the need to hire more people.”
In fact, Lewis claims that the key to unlocking the job market and adding much needed grease to the system is to get the presently employed to leave their current job willingly for a new job.
“By having that occur, you start to make a dent in the massive number of people who are still out there looking for work,” he says. “If you’re going to get the economy moving and change the dynamics of the job market, then that is the way to do it.”
A LIVING ORGANISM
Over the last three decades, the job market has shown that jobs vacated at Tier 1 or Tier 2 firms – less prestigious companies with lower pay, lesser benefits, and a generally mediocre environment for employees – tend to be the positions where the unemployed frequently land.
This is because Tier 1 firms are inclined to search for candidates who are employed or were at least recently employed, leaving applicants who are in less demand to companies which, well, are in less demand, too. This has repeatedly shown to be the best method at drastically reducing the number of unemployed Americans.
“The job market is like a living organism, and this is how it functions,” Lewis says. “Rarely has it been through an emerging industry growing rapidly or existing companies adding new positions and taking people who are unemployed off the ranks.”
This is why the previously mentioned Gallup poll’s findings are so crucial. The much talked about optimism may ultimately spearhead a downward move in the census’s still uncomfortably high unemployment rate.
However, not all is sunny.
The Gallup poll states that 70 percent of Americans say now is a “bad time” to find a quality job, which, despite being the lowest level reported over five years, is still down in the dumps.
Those living in the East are somewhat less optimistic than those living in other regions are, as are whites and Americans over 65 years of age. So are Republicans, compared to their independent and Democratic counterparts.
“It is somewhat pathetic to be jumping up and down about a 25 percent number in optimism, but it is progress. We’ll take progress,” Lewis says. “The reaction mimics the job market in the sense that there have not been any huge gains in employment in the last five years. There has not been any significant growth in any market or markets. It has been a very slow, very gradual, and very frustrating process, and these numbers mirror that.”
If nothing else, he says, the “fear factor” in regards to the economy and its attached job market has been drastically reduced.
“In 2009, not many people, if any, were actively engaged or seriously considering leaving their present job to go work for another company,” he explains. “They were fearful that if they left now, they would be the most recent employee hired at their new company. And, with all the instability in the economy, if that company decided that they needed to lay people off and reduce workforce, then the last person to move in could end up being the first person on the street. The economy has improved enough in that people do not fear that anymore.”
Likewise, the movement of employed people moving from their existing positions into new positions is also going to start to send a resounding message to Corporate America.
“We preached and operated on the basis that we wanted stability, and that stability was sort of to just be thankful for the jobs we were in and do everything we can to stay in good standing and to retain those jobs,” Lewis says. “That message is that companies have to start realizing that the days of treating your employees in a way in which you are asking them to do more without compensating them for that additional work are starting to end.”
HOW MANUFACTURING FITS IN
Most manufacturing firms, according to Lewis, experience extremely low turnover, in good and in bad economies. Those businesses, for the most part, often defy the economic trends most commonly seen in other parts of the economy.
For instance, it’s rare for a traditional white-collar employee to receive a gold watch celebrating a certain number of years at one company. These types of employees have a habit of changing jobs far too many times.
“But in manufacturing, that is usually not the case,” Lewis explains. “Manufacturing is still the type of environment where when people walk into the door, at whatever point they do, it is rare that they walk out voluntarily. It is more common that they stick around.”
So, on one hand, you could look at this latest Gallup survey, shrug, and say it does not apply for hiring managers in manufacturing. On the other hand, that may also be the problem. It doesn’t apply to manufacturing as much as it should.
“Manufacturing has a major issue, and it’s that this country no longer produces the same volume of candidates to backfill and fill positions in the manufacturing sector at the rate the industry requires,” Lewis says. “It’s why the average age of manufacturing employees is in their 50s and 60s. Manufacturers are having such a difficult time finding, at least in an easy fashion, students coming out of technical schools to fill those positions.”
The opposite happened in the 1970s, when manufacturers were spoiled by how easy it was to pull students out of technical schools and colleges who were already equipped with the basic know-how needed to thrive in a manufacturing environment. “There were ads on TV for technical schools promising to train in manufacturing. You don’t see that anymore. It is not that much a part of our culture anymore.”
Consequently, manufacturers need to draft a strategy of how they plan to attract much-needed talent to their sector in the coming 10 to 20 years. “The open casting approach, which is putting a job ad in the local paper or online somewhere, is not going to give you enough of a candidate pool to choose from,” Lewis explains. “If you do that, it will be too small of a pool that will almost certainly lack necessary skill sets.”
They also need to plan on how they’ll keep the top-notch talent they already have, Lewis says. That’s because manufacturing, which suffered a massive amount of cuts long before the Great Recession materialized, also asked fewer employees to do more work for the same amount of compensation, sometimes less.
“There were pay cuts and furloughs, and that wore then on manufacturing folks, too,” Lewis says. “In a very competitive market to find talent, like manufacturing, those entities that are doing well will eventually need to hire. When they do, they’ll realize that the hiring well is so dry at the entry level point that they will take a cannibalistic approach and grab people from competitor’s shops by offering them a better salary, more benefits, more vacation time, and a greater sense of appreciation.”
The big problem with that, Lewis adds, is it is rare that just one person bolts town. “It is typical that when you find one person who is willing to jump ship and go to another shop in another market, that person will have a number of people behind them who will walk out and go with them,” Lewis says.
Because of the ongoing skill gap, such behavior may soon be on the rise, Lewis says. And unlike other industries, Tier 2 and Tier 3 manufacturers will not have alternate candidates to turn to – because there is no one to turn to.
“That is the potential real threat,” he says. “You cannot see it between the lines in a Gallup poll like this, but at the same time I think it is the real threat the industry is dealing with as a whole.”
He adds, “If you are the weak link – if you are the company in a particular market that pays the lowest, has demonstrated the least amount of appreciation for its employees, and, in the employees’ view, has taken advantage of the situation by making people work more for less – you are likely to be the place where competitors are going to pick at to find talent.”
Especially when the job requirements standard in the last several years has decreased from a list of 20 must-have skills in manufacturing to maybe a list of five, he adds.
“That’s because you cannot find people with the 15 other requirements. Candidates with that kind of training do not exist anymore,” Lewis says. “Now, as you compromise your requirements and become more flexible in terms of who you are willing to hire and how much you are willing to train, finding experienced candidates from another shop becomes a better option than hiring those who are completely green and as such are going to require you to train them longer, with a greater risk as to whether or not they will succeed.”
About David Lewis
David Lewis is the President and CEO of OperationsInc, a human resources outsourcing and consulting firms providing recruitment and other HR-related services to over 700 clients in the small to mid-sized business space. He also serves as CEO of AllCountyJobs.com, a leading regional job board network comprised of 21 local online job boards covering the Northeast U.S. corridor.