The U.S. added 943,000 jobs in July, according to the Bureau of Labor Statistics. This is ahead of analysts’ expectations and helped push the country’s unemployment rate down to 5.4 percent. Tracking this growth, The Conference Board’s Employment Trends Index increased again in July for the fifth consecutive month, reaching 109.8, up from 108.96 in June.
“The Employment Trends Index remained on its historically strong upward trajectory, suggesting rapid job growth is likely to continue over the next several months,” says Gad Levanon, head of The Conference Board Labor Markets Institute. “This high mark comes off the back of nearly one million new jobs added in both June and July and a steep decline in the unemployment rate. However, recruiting and retention difficulties—and rapid wage growth—are expected through the summer, particularly in industries key to the reopening of the economy, such as food service and leisure and hospitality. The rapid wage growth is likely to lead to higher inflation in the coming year.”
Levanon adds, “Despite the still-high unemployment rate, many employers are having difficulty finding qualified workers. According to the National Federation of Independent Business, 49 percent of firms reported being unable to fill open positions in July—an all-time high. For many of those currently unemployed, job-search intensity remains low due to an array of factors: enhanced unemployment benefits, fears of getting infected, a lack of childcare, and interest in pursuing and preparing for a different type of career. Going forward, we do expect economic activity in in-person services to be negatively impacted by the current resurgence of infections fueled by the ‘Delta’ variant. While this Delta wave may produce slight slowdowns in hiring, we expect job growth to remain very strong overall.”
Businesses in the promotional products industry are approaching hiring from new angles to manage the tight labor market. Dawn Conway, CEO of distributor Boost Engagement in Dayton, Ohio, says, “We have been affected; it has been challenging finding candidates to fill entry-level positions, specifically warehouse associates. The most successful step in recruiting talent is referrals from our employees. We have a points-based referral program that is heavily promoted through our proprietary engagement platform, which is one of Boost Engagement’s core offerings.”
Kevin Walsh, CAS, president of supplier Showdown Displays in Brooklyn Center, Minnesota, says, “We’ve had to become more creative, flexible and aggressive. Pre-pandemic, Showdown had built a healthy pipeline of prospective employees as a desirable employer and fun place to work. Those prospects and that pipeline has evaporated post-pandemic. As a result we’ve taken multiple steps to increase interest for applicants and attract the type of team member that wants to be part of Showdown Displays. This includes; No.1, increasing our existing referral bonus program for associates, No. 2, offering signing bonuses to new employees, No.3, increasing entry-level rates—as well as the subsequent rates for existing employees—and No. 4, re-instating our profit-sharing program. It’s a competitive market out there so offering a suite of incentives is required.”
Labor shortages are not confined to the U.S. Yesterday, The Wall Street Journal reported that as global demand for goods surges, Chinese factories are having difficulty filling jobs because many young people are rejecting factory jobs in favor of service-industry jobs that pay better and migrant workers are staying home amid COVID-19 fears. The story goes on to say that the trends may be indicative of longer-term demographic changes, including a shrinking labor pool.