The world of work is changing very quickly. Over the next few weeks, we’ll be examining some of the trends that are currently impacting the workforce, from hiring to the impacts of artificial intelligence.
Every Thursday, we’ll be publishing a new article on a different workforce trend. Here’s when to expect each of our following articles in the 2019 Trends series:
Thursday, January 10 -- Hiring Trends
Thursday, January 17 -- Hourly Workers
Thursday, January 24 -- Customer Service
Thursday, January 31 -- Retail
Thursday, February 7 -- Office & HR
Thursday, February 14 -- Artificial Intelligence
If you followed any of the job news from the last year, you probably noticed a trend: The job market was white hot.
But, there’s some underlying trends which illustrate some key challenges that businesses must overcome in order to take advantage of this oft-changing marketplace. For starters, because the job market is so good, the advantage has flipped to that of the employee. Just as quickly as a retailer can hire an employee, they can easily leave and go across the street to another employer for a modest raise or even slight improvements in benefits, like vacation time, gas cards, or performance bonuses.
At the same time, there’s currently more than a million vacant jobs. More workers are taking on additional jobs (side hustles and freelance gigs), and many want to earn additional pay through more hours, but can’t quite secure them.
That being said, it’s an exciting but equally challenging moment for everyone whether you’re working in retail or manufacturing. Here’s some of the trends that we are seeing that will impact the way people are hired this year.
The Workforce Is Becoming Increasingly, Alternative
Freelancers. E-lancers. Gig workers. Contract, contingent, crowd-sourced, side hustlers.
No matter how you classify them, there’s a new crop of alternative workers that are rising in the employment ranks. There’s a myriad of reasons that are behind this rise in the alternative, ‘gig’ worker. Some need extra cash to help pay mounting bills, expenses and rent while others are looking to expand their horizons and look to add additional skills.
We’re Going To Be Hearing A Lot About ‘Gen Z’
Now that we’ve talked about the rising numbers of alternative workers, it’s a good time to chat about what will assuredly become our next biggest labor pool. Move over Generation X, it’s time to meet Gen Z.
All debates about how we’re running out of late-alphabet letter to categorically assign to a large swath of our workplace incumbents aside, it’s important to start to understand some of the traits that shape this entirely new generation of workers that will soon flood the marketplace.
First, it’s important to understand how recent economic events have shaped their worldview. According to an article in Forbes, there’s a close parallel to how both Gen Z and the Millennial cohorts professional aspirations and career goals have been shaped by recent economic events. The thesis of the past decade for both has been to prepare for slow, tedious economic growth and to be lucky if you had a job. The expectation was for low wages and impacted career growth:
As the economy slowly improved, Millennial wages remained mostly flat. More opportunities came, and today if you weathered the worst of it and came out with 5-10 years of experience in your profession, you have your pick of jobs around the world. But if you joined the workforce between the years 2008 to 2014, you’re likely still wearing some scars.
Conversely, Gen Z did most of its “grown-up preparation” during a time of unprecedented growth—couched in the recovery that led to a current streak of 94 consecutive months of job creation. They’ve heard the horror stories from their older siblings, but the reality for them has been the opposite.
So, what can we glean from this knowledge? Each generation has its strengths. While Millennials are often lambasted, as are the younger Gen Z, they both also have many positive attributes. Millennials often have a great sense of purpose and willingness to work for companies that are transparent and mission-driven. Gen Z’ers have tenacity to learn new skills and often, they don’t pretend they know everything. Because they’re a product of an entirely mobile world, they are digitally-savvy, and carry attributes that can fit well in a company thinking about the future.
Understanding what these attributes are can help managers plan their hiring, onboarding, and ongoing training.
We’ll Have Less Than 3 Years To Take Skills Training Seriously
While upskilling has become a major focus, we believe you’ll have about three years to take skills training really seriously.
Business will be reticent to change if there’s a big enough gap between the skills needed by frontline employees, and the ideas of corporate leadership. According to the World Economic Forum:
These skills translate to many emerging job categories, too. Whereas data entry jobs is a job greatly decreasing and facing looming threats by automation and AI, data analysts and scientists are at the top of the list for the ten emerging jobs.
Companies Need To Dig Deep, Pay To Close Unfilled Jobs
When some employees will leave a job in an instant for a very modest raise or another perk (such as gas cards or vacation time), it may fall on the employer to do more to nab talent looking for work.
In some cases, the benefits and perks are really important differentiators -- as are other more cultural hallmarks like transparency and mission-driven companies -- but, according to Minneapolis Fed President Neel Kashkari, they may have to start paying people more.
“I oftentimes hear businesses saying I just can’t find the workers that I need,” the central bank official said during a conference on immigration in his home district. “Now, I’m not entirely sympathetic with that view, because I’ve been saying you should try paying more, and you may be able to attract more workers,” he explained in an article with CNBC.
Now, payment is merely a small fraction of this conversation. Benefits and perks as well as the growing national debate around immigration, also factor into the lingering questions of how employers secure workers.
“You realize that immigration does have a role to play in helping both those problems,” Kashkari mentions with regards to the conversations he has with business owners that represent his district.
This will be a key theme heading deeper into 2019 and will especially be important to verticals like construction and trades, manufacturing, and the sectors that rely heavily on hourly workers like fast food and retail.
Ageism’s Negative Impact On Readily Available, Able Employees
While there’s so many jobs available, it is becoming increasingly difficult for some older professionals to keep theirs. According to research by ProPublica, more than half of workers over the age of 50 are pushed out of their careers.
While diversity is becoming a much more visible talking point for HR and hiring managers, ageism should also join the ranks of a topic we talk more about -- especially as entire industries are looking to fill gaps in their employment.
Hourly Employees Want More Hours
Throughout this labor shortage it's never been harder for employers to find hourly talent especially during the holiday season. This is compounded with the fact that we continue to hear from the Fortune 1000 that employee turnover continues to remain high. There's upwards of 100 percent annual turnover.
When we talk to these employees, the consistent message we hear from them is this: Employees simply want more hours and more money.
Hourly employees are either looking for more hours, or an additional job to supplement their income.
But, what’s so interesting about that, is that these same companies, are also seeing open shift coverage rates as low as 15%. In the context of retail, what that means is that there are opportunities for additional shifts that simply go uncovered by employees in a store.
There’s a huge disconnect here because on one hand, employees want more hours, but on the other, they’re not picking up additional shifts.
We believe that companies will increasingly leverage proximity to bring current employees into the fold.
Here's what we know from low coverage rates: At a single location there are limited personnel options for meeting demand. Even if employees want more hours, they are often unable to pick up shifts at the last minute due to personal conflicts.
But, if we increase the employee pool by five times the amount by considering all of the locations within a geographic area, say a five-mile radius, the pool of employees grows and therefore significantly increases the chances that a shift gets covered.
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