In May 2015, the United States economy added 280,000 jobs, surpassing analysts’ predictions of 220,000 job gains. Unemployment increased slightly to 5.5 percent, which economists say might be a sign that more people returned to the labor force to look for work in May.
On a year-over-year basis, total nonfarm employment was up 2.2 percent, and monthly job gains have averaged 254,833 over the past 12 months.
Job gains were seen across many industries, with health care adding 47,000 jobs, and business services adding 63,000 jobs. Energy companies continued to slash jobs due to low gas and oil prices, with mining and drilling jobs dropping by 17,000 in May 2015.
Temporary help services employment added 20,100 jobs, and the temporary penetration rate increased from 2.04 percent to 2.05 percent, marking a new all-time high. Year-over-year, temporary help employment is up 5.8 percent, and monthly job gains have averaged 13,358 over the past 12 months.
Growth of Temp Population vs. Non-Farm Population
Wages grew by 0.3 percent in May compared to the previous month, and rose 2.3 percent over the prior year. This year-on-year increase is the most since October 2009.
Wages Growing Faster at Large Companies
According to new research by Goldman Sachs, larger companies in the U.S. show strong revenue growth, increased employment, and robust wage growth. Compared to smaller companies, wage growth in big companies is much faster. Between 1996 and 2009, pay at bigger companies outpaced smaller companies by 6 percent; after 2009, this difference increased to 14 percent.
Wage Growth at Large Companies vs. Small Companies
Employers Struggling to Fill Vacancies
According to a recent survey on talent shortages, it was found that 32 percent of U.S. employers have difficulties in filling job vacancies. Globally, the percentage of employers experiencing difficulties has increased from 36 percent in 2014 to 38 percent in 2015.
Among U.S. employers, 48 percent say that talent shortages have a medium to high impact on their businesses, yet not many are implementing talent strategies to address the issue. Approximately 20 percent of U.S. employers currently have no strategy to deal with talent shortages. For the companies that are trying to overcome hiring challenges, top strategies include adopting people practices, exploring new talent sources, and implementing alternative work models.
Skilled trade vacancies are the hardest to fill both in the United States and globally. In the U.S., the hardest to fill jobs are drivers and teachers. The jobs most in demand in 2015 also include skilled trade workers, sales representatives, administrative professionals, management and executives, nurses, technicians, accounting and financial staff, and engineers.
Approximately 43 percent of employers say that the talent shortages have a negative impact on their ability to meet client needs, and consequences include reduced competitiveness and productivity, increased worker turnover, higher compensation costs, reduced worker engagement, and reduced innovation and creativity.
When asked for reasons that they are struggling to fill positions, employers point to a lack of applicants, a lack of experience among candidates, and a lack of technical competencies.
A new report by the U.S. Government Accountability Office finds that 40.4 percent of the U.S. workforce is now made up of contingent workers.
The Contingent Workforce
Source: U.S. Government Accountability Office
This is a large increase from the report in 2005, where 30.6 percent of workers were contingent. The biggest growth has been among people with part-time jobs, who made up only 11.9 percent of the labor force in 2005.
Some experts believe that the definition of the contingent workforce should be narrow. If the definition of these workers only includes agency temps, on-call workers and contract company workers – known in the government as “core” contingent workers” – this percentage of the working population in the contingent jobs is 7.8 percent.
The Most Profitable Industries
Recently Sageworks, a financial information company, released its rankings of the most profitable industries. These rankings were based on analyzing the financial statements of many privately held companies and looking at net profit margins over the course of 12 months. A majority of the top 15 industries are related to health care or real estate, while some others are service-based businesses that have the ability to keep costs low while charging premiums.
Top 15 Most Profitable Industries
U.S. Cities with Longest Work Weeks
A recent study by Forbes sought to find which cities in the United States have the longest work weeks. It uncovered that San Francisco is America’s hardest working city, with workers putting in an average weekly shift of 44 hours. However, when factoring in commute, New York has the longest working week at 49.08 hours.
The average working week for large American cities is approximately 42.4 hours, and increases to 46.5 hours when including commuting.
Cities with Longest Working Weeks
India’s Just-in-Time Job Application
In India, the significant rise of smartphone usage has led staffing firms to begin focusing heavily on mobile recruiting strategies, which would allow job seekers to apply for opportunities in under a minute. These staffing firms are also starting to heavily use social networks such as LinkedIn, Facebook, Twitter, Instagram, and YouTube for image building, marketing, publicity, market research, and customer relations.
According to Suchita Dutta, Executive Director of the Indian Staffing Federation, staffing companies are increasingly interested in attracting top talent and are thus trying to engage candidates on social media platforms.
The mobile Internet penetration rate in India has already increased substantially since 2012, and is expected to grow further through 2018. In 2013, 10.4 percent of the population accessed the Internet from their smartphone, and this figure is expected to increase to 22.8 percent in 2017.
India’s Mobile Internet Penetration Rate
Source: Press Trust of India
The Potential of Online Talent Platforms
According to McKinsey and Co., online talent platforms have the potential of revolutionizing the global labor market. A new report from McKinsey finds that online talent platforms have the ability to improve job outcomes and raise global GDP by $2.7 trillion per year. Additionally, companies adopting talent management platforms could also increase output by up to 9 percent and reduce HR and talent-related costs by up to 7 percent. McKinsey says that the adoption of online talent systems unlocks real economic value by creating better and faster matching between workers and available job opportunities. These platforms enable companies to not only identify and recruit candidates, but also motivate them and improve their productivity once they join.
“The companies at the leading edge of these trends are cultivating real analytic and social media skills in their HR. They are also creating more personalized work environment with interactive tools embedded into everyday processes to support business priorities.” ~McKinsey and Company
Share of GDP Increase by Source, $ Trillion
Source: McKinsey and Company