The unemployment rate in the United States was at 4.5% in March 2017. This is the lowest it has been since Jan 1, 2001, according to historic data documented by the Bureau of Labor Statistics. During the same month, the BLS measured the labor force participation rate at 63.0%. This indicates the majority of Americans participate in the labor force, and job opportunities abound.
In fact, the abundance of hiring has now led to a shortage of employees. In April 2016, the economy set a new all-time record of 5.85 million unfilled job openings. This was the highest since the BLS started collecting surveys of open jobs in 2000, according to Glassdoor. However, with a large amount of open jobs, hiring top talent becomes even harder.
What a tight labor market means for hiring
There is little argument that the United States is experiencing a “tight” labor market. There are far more jobs than workers.
A recent survey conducted by Jobvite shows 65% of the 1,600 recruiters they sampled claim talent shortage is the biggest challenge in hiring. NFIB agrees, saying that 58% of small businesses they surveyed are reportedly “hiring or trying to hire." 52% reported scarcity or lack of qualified applicants for their open positions.
A tight labor market means candidates are more valuable than ever. They drive the market. This also means that valuable employees, who are seemingly happy, might have one foot out the door thanks to temptation from other opportunities.
How employers are impacted
A tight labor market is synonymous with an employee's labor market. Regardless of an employee's satisfaction, they know there are many other options to consider, making loyalty secondary. A job seeker study conducted by Jobvite shows that 74% of the workforce are open to making a job move, and 51% of employers are satisfied but would consider a job move.
Talent leaders value quality of hire, and recently, tracking turnover has been a way to measure a successful hiring process. In other words, because of the difficulty recruiters feel from the marketplace, retention has become a major initiative. Retention should be of utmost importance to companies.
The cost of turnover, and the inability to hire in a tight job market makes your current staff more valuable than ever. 32% of recruiters responded to a LinkedIn survey saying employee retention is their priority in the next 12 months.
Offer something your competition doesn’t
Finding an incentive your competition doesn’t have can help both retain and attract top talent. It can also help to increase job applicants for your open positions.
DailyPay is an on-demand payment solution that allows employees to be paid daily, at no cost, (or payroll disruption) to your company. Users of the application can see exactly how much they have earned since their last paycheck. They are able to withdrawal the amount they have available as often as they would like.
We recently conducted a survey wherein we learned that employees who are offered DailyPay at their workplace are more engaged.
- 73% of DailyPay users say they are motivated to come to work.
- Companies that use DailyPay experience on average 41% reduction in turnover.
- Best of all, applicants were 1.9 times more likely to apply for the job with daily pay versus the job weekly pay.