In June 2015, the unemployment rate declined to 5.3 percent with nonfarm payroll employment increasing by 223,000, according to the U.S. Bureau of Labor Statistics (BLS). Average hourly earnings remained unchanged from the previous month’s labor report at $24.95. Over the year, wages have increased by 2 percent.
Job gains occurred in professional and business services by 64,000 jobs, while healthcare gained 40,000 jobs, and retail trade added 33,000 jobs. Other job gains were seen in food and drinking places with 30,000 jobs added, financial activities with 20,000 jobs added, and transportation and warehousing by 17,000 jobs added. Meanwhile, the mining industry continued to lose jobs, with a decrease of 4,000 jobs. Since December 2014, mining has lost a total of 71,000 jobs. Other industries including construction, manufacturing, government, wholesale trade, and information, were flat in June 2015.
Spending on Talent Acquisition Up
U.S. companies increased talent acquisition spending 7 percent year-over-year in 2014 to nearly $4,000 in cost per hire, according to research from Bersin by Deloitte. This spending was driven by increased competition for talent and the skills gap. According to the research, spending was more heavily focused on professional networks, accounting for 12 percent of recruiting budgets on average. Meanwhile, agencies and third-party recruiters made up 18 percent of the recruiting budget, down from 38 percent in 2011. Despite the increased spending on professional networks, the research showed that company websites drive more hires than any other source.
Cost per Hire by Industry, 2014
Source: Bersin by Deloitte
The study also found that companies generally take 52 days on average to fill open positions, up from 48 days in 2011. Additionally, healthcare organizations had the largest increase in spending at 16 percent, and also saw the largest new-hire turnover at 17 percent. It was revealed that high-impact talent acquisition functions have a 40 percent lower new-hire turnover rate and are able to fill vacancies 20 percent faster than companies with more tactical recruiting functions.
The Risk of Technological Progress
It’s no surprise that technology is getting better, faster, and more intelligent. And it’s making many people nervous about the impact it will have on our economic future. Just recently, Silicon Valley venture capitalists and executives published an open letter about the digital economy, calling for public-policy changes and new organizational models that take into account this era of sweeping technological change.
Meanwhile, several scholars are discussing the dangers of technological progress. According to Wendell Wallach, a researcher at the Yale University Interdisciplinary Center for Bioethics, technology is now destroying more jobs than it creates. Martin Ford, a software developer and Silicon Valley entrepreneur, recently published a book – “Rise of the Robots” – in efforts to generate a conversation about a jobless future. He says that when most people talk about robots, they imagine factories, yet factory jobs have not been around for years. According to Ford, the risk of a job being automated depends more on the type of function performed than the industry it is in. And with creative computing underway, even the most artful jobs could be in danger of being automated; already today algorithms can write symphonies and paint original paintings. He worries that since jobs and income are normally packaged together, the economic consequences could be huge as jobs drive consumption, and consumption drives the economy.
A recent study by the McKinsey Global institute is more optimistic, saying that digital tools could benefit as many as 540 million people in various ways, including better matches of their skills with jobs and increased wages. Other experts point towards the Industrial Revolution, which ultimately led to more employment opportunities, and believe the same will happen during this second machine age. Some experts believe that an increase in computing power will simply eliminate old jobs and introduce new ones, resulting in a net-zero effect on employment.
In May 2015, Shenzhen Evenwin Precision Technology, a manufacturing company based in southern China, announced it would soon be replacing 90 percent of its 1,800 employees with machines. The employees not laid off would be taking on new roles of overseeing the robotic workforce. Additionally, a recent Oxford University study predicts that 47 percent of U.S. jobs could be automated within one or two decades.
A recent Harvard Business Review study examined the relationship between the use of industrial robots and job loss. According to their premise, if robots are a substitute for human workers, then one would expect the countries with higher investment rates in automation to have experienced greater employment loss in their manufacturing sectors. However, the study showed that there was essentially no visible relationship between the use of robots and change in manufacturing employment. For example, despite the installation of far more robots between 1993 and 2007, Germany only lost 19 percent of its manufacturing jobs between 1996 and 2012. Korea, France, and Italy, though they added more industrial robots than the U.S., lost fewer manufacturing jobs, compared to the 33 percent drops in the U.S. And countries such as the United Kingdom and Australia invested less in robots but saw faster declines in their manufacturing sectors.
Relationship Between a Country’s Use of Robots and Percentage of Manufacturing Jobs Lost
The Impact of Worker Engagement on ROI
According to a recent report on global employee engagement by Aon Hewitt, companies with higher worker engagement see the biggest financial gains both in sales and shareholder returns. The gains result in additional 4 percent in sales growth and shareholder return, compared to an average company. Meanwhile companies with lower worker engagement see large financial loss, with a shareholder return of 8 percent less than the average company.
Top Engagement Companies vs. Bottom Engagement Companies
Source: Aon Hewitt
A recent poll by Gallup reveals that only 13 percent of the global workforce is “highly engaged”. Companies are recognizing the importance of an engaged workforce, with 87 percent of respondents in a separate survey by Deloitte saying that they believe the issue is “important”, while 50 percent cite the problem as “very important”. Two-thirds of HR respondents report they are in the process of updating their engagement and retention strategies. A substantial portion of respondents (22 percent) report that their organizations have either a poor program to measure and improve engagement, or no program at all. Only 7 percent rate themselves as excellent at measuring, driving, and improving engagement.