HR Professionals Economic Pulse Check
With unemployment rates remaining low and economic reports and projections for the rest of 2017 still showing strength, the U.S. economy is off to a roaring start in the first quarter of the year. But that doesn’t mean U.S. and California businesses aren’t experiencing significant challenges. When unemployment is low, it becomes more difficult for companies to find and hire qualified employees; and because human resources professionals are on the front lines of hiring, they can often share significant insights on how the economic environment is impacting a company before those trends become apparent in financial reports and other company data.
Nelson surveyed attendees at the recent HR West conference, March 6-8 in Oakland, California, to take a quick pulse check of how the economy is impacting HR professionals and companies in California. We uncovered two key insights:
Insight #1: HR professionals still report experiencing difficulties when trying to fill open positions in 2017.
Nearly 83% of employers experienced at least some difficulty when trying to fill open positions in 2017. This percentage was nearly identical to one reported in a statewide survey Nelson conducted in 2016, revealing that employers are not having an easier time trying to attract talent in 2017.
With unemployment rates continuing to decline, employers face more and more difficulty in finding highly specialized talent – meaning larger companies may experience even more hiring difficulties than smaller ones due to more specialized talent
needs. As companies grow and break out responsibilities into more highly specialized roles, they seek talent with very specific backgrounds and skillsets. Smaller companies may be more likely to look for people who can “wear multiple hats,” reducing the importance of extremely specific experience and skillsets.
This was reflected in our survey, with larger companies more likely than smaller companies to report recent hiring difficulty; over 96% of companies with more than 500 employees reported experiencing at least some difficulty.
Insight #2: Despite strong economic reports, HR professionals are tempered in their economic optimism.
Only 8% of conference attendees surveyed reported having a high level of confidence in the economic outlook for the rest of the year. Even more (14%) reported a low confidence level, while the vast majority of attendees (78%) reported a moderate confidence level.
Uncertainty due to U.S. and international political conditions, rising cost of living (especially housing costs in California), and slow gains in business and wage growth are leveling out the optimism that generally accompanies low unemployment rates and stock market gains.
Economic confidence level varied by company size, though; respondents from smaller companies were more likely to report a low economic confidence level (23% at companies with less than 100 employees, vs. just 10% at companies with more than 1,000 employees).
Confidence level also correlated with hiring difficulty experiences. Not one person who reported that hiring has been very difficult in 2017 also reported a high economic confidence level.
While economic data continue to point to growth and progress, optimism is not widespread. Throughout the rest of 2017 and beyond, companies will continue to feel the crunch of talent shortages resulting from low unemployment – especially in industries and specialties where specialized talent is in high demand. Working with a staffing company like Nelson is one strategy for overcoming these talent shortages. If your company is experiencing difficulty finding the talent you need to foster growth and success, contact Nelson to learn how we can help.