Currently, unemployment rates are hitting some of the lowest numbers since the late 1960s. That statement sounds great, right? Many people don’t know what this actually means, and while low unemployment is generally a good thing, very low rates can affect the job market in interesting ways. What does this mean for someone looking to get hired? Job hunting on generic job boards like Monster or Indeed might not cut it anymore. And what does this mean as an employer or Human Resource (HR) manager? Below, we break down what the current state of affairs means for today’s job market.
What Does a Low Unemployment Rate Mean?
The unemployment rate is defined as the percentage of people who don’t have jobs but are actively looking. A typical rule of thumb is that the lower the unemployment rate, the better it is for the economy. Some of the highest rates this country has ever seen came in the 1980s, as unemployment skyrocketed above 10% at times. Average unemployment, however, tends to hover around 5%, but lately, and for the last decade, the rate has been steadily declining, reaching percentages as low as 3.6%. Currently, the unemployment rate is hitting the lowest numbers we’ve seen in the last 50 years. While this is good news overall, too low of an unemployment rate can sometimes have negative effects on the job market.
What Does Low Unemployment Mean for the Hiring Process?
A low unemployment rate is typically an indicator of a job seekers’ market. With a smaller percentage of people looking for a job, people that do decide to actively job hunt may find more offers from which to choose. Job seekers can now afford to be a little bit more picky due to an abundance of job availability.
Conversely, businesses tend to have difficulty finding a number of competitive candidates with impeccable resumes, especially for “rank and file” employees. Eventually, employers start to settle for and appeal to job seekers, as filling the need becomes more important than finding the “perfect fit.” HR departments start to spend more of their money on elaborate onboarding and training processes and less on sourcing the perfect candidate. Accordingly, in times of low unemployment rates, companies lengthen their job interview process to ensure the candidates show diligence, reliability, and thorough interest.
At the same time, employers cannot afford high turnover. With fewer ideal candidates to choose from, it takes too long, costs too much, and wastes too many resources to complete a lengthy onboarding process just to lose that new employee. The added pressure can cause an increase in tension in the workplace, and retention becomes more important than ever before— this places significant emphasis on work culture and keeping employees happy.
With the unemployment rate continuing to drop, it is imperative for employers to source their talent in an efficient manner. Unreliable and unmotivated candidates from generic job search sites are far too risky, and hiring managers can’t exactly wait around for the dream referral with an open desk that needs filling.
Simplified Talent Sourcing With Canduit Connection
Canduit Connection specializes in connecting targeted job seekers with employment opportunities in growing businesses with high labor turnover. We are dedicated to simplifying and streamlining the talent sourcing process to make hiring easy, affordable, and effective. Canduit Connection has transformed the modern recruiting experience to develop a people-focused approach that promotes lasting partnerships and long-term business growth. Contact us today to build a connection and take the next steps.