The State of Employment Part 1

The following is a transcription from a webinar we co-hosted with Express Employment Professionals

We’re going to look at some learning objectives very quickly:

  • Identify the current state of employment nationally and locally and how it impacts the current workforce and workplace.
  • Gain a better understanding of the causes for the talent crisis.
  • Identify three strategic onboarding practices: engagement, training, and development.

Let’s look at the state of the nation. As of June 3rd 2016, the current national unemployment rate is sitting at around 4.7%, which is great. Here in Michigan, you will see that it is different. I’ll give you a little bit of background on specifically what's going on with some groups. We have 16% unemployment rate for teenagers that range between 16 and 19. For African Americans, the unemployment rate is higher than the national unemployment rate at 8%. For Hispanics, the unemployment rate is at 5.9%. 4% for Whites and Asians. So, there are some differences there and we are going to be talking a little bit about the fact that right now there is over 5.5 million job opening. We have way more job openings than we do job seekers. There is something called the declining labor force population rate which is going down and I’ll talk about a little more next. 

The labor force participation rate is the percentage of working-age persons in any economy who are employed or unemployed, but looking for a job. These people are generally working age people between the ages of 16 to 64. Excluded from this group are students, homemakers, non-civilians, those who are institutionalized, and people under the age of 64 who are already retired. In May of this year (2016), that labor force participation rate actually fell again to 62.6%. So what does this mean? To put it simply, it means there are 400,000 less people available to work. So that is what is causing and driving a lot of this talent crisis problem that we have. Back in 1997, we had the labor force participation rate at 68%. In addition to that, we have 10,000 baby boomers retiring every day in this country. By 2025, we’ll have about 75% of all baby boomers out of the workforce.

Let’s look at the Grand Rapids recovery. Grand Rapids has outpaced the national and the state recovery overall, at a higher rate. The U.S. has hovered just over what was the pre-recession rate, but Grand Rapids has actually recovered greater than where they were at pre-recession rate. Additionally here, what is the unemployment rate for this area? We’re looking at 2.9%, which that actually just dropped in the last couple months. Everyone thinks that is great, we have a lot of people working, but you know we still have a lot of job openings. This is actually an unhealthy rate because we have 16,250 people who are unemployed, but in this area, we have 30,000 jobs. This means there is a half a person for every job opening. In 2010, we had 7 people for every job opening, so again, this is all alluding to the fact that we have a talent crisis. In addition to that, 29% of the workforce that could be working are on a disability list and we are the second highest state that has the most on disability. 30-35% of Americans have some kind of police record, which is also something that is stirring up conversation on banning the box. I would encourage you to look that up if you don’t know what that is. Again, these are just some statistics to get you thinking about what is happening. 

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Express Employment, along with 3 or 4 other companies, were invited to a meeting to say “tell us what is going on in the workforce? What are some of the biggest challenges that staffing agencies see, as well as companies."

As you can see, the higher the numbers, the 4’s and we have a couple 5’s. That is saying they’re rating the particular use as being difficult to being very difficult. So, some of those issues that we frequently see with folks that we’re trying to place are transportation and child care; they have criminal records, maybe a lack of technical skills. There may be some drug use or low educational levels. One of the biggest issues is lack of some soft skills, so that is the ability to have effective communication and problem-solving. These are the issues being seen by anyone who is having to do some recruiting. 

What does the workforce say? We shared a little bit about what's happening with the workplace and the lack of talent, but here is the other side of what is going on. 

The workforce feels:

  • Pay is too low
  • Poor relationship with supervisor
  • Part time is not enough
  • Little to no benefits
  • Working too many weekends
  • Don’t feel valued

So let’s look at some quick facts for Michigan. The 2014 median household income was at $49,087. The poverty income threshold is $26,143. The poverty income actually comes out to about $12.57 per hour. This just gives you some numbers to look at. Next, I want to look at the cost of living here in Grand Rapids. 

The average cost:

  • Rent: 1 bedroom apartment - $687.08
  • Utilities: 268.51
  • Food: 500.10
  • Transportation (bus): 47

Total: $1,502.69

You can see we aren’t accounting for clothing, or phone bills. At $12 per hour, that equates to about $1,560 a month. Definitely, there are some wage disparages that are going on. Companies are getting more in tune to the fact that folks aren’t going to be as engaged or willing to stay at an organization where pay can’t meet the bills. Regardless of who wonderful the relationship is with their supervisor, or the culture, if they can’t cut the bills, people will leave. 
Here’s a statistic that I think is absolutely mind-blowing. 80% of all Grand Rapids public school students are eligible for reduced or free lunches. It says something, yeah we’re in a good economy, things are going well, but there are some people that are not cutting it and are really going through some difficult times. 

Some other statistics that have a little more to do with soft skills, I gave a lot of hard skills, but let’s look at some soft skills. 

31.5% of employees say they are engaged at work. That means 69.5% of your folks are not engaged. If you take 10 people and count off 7 they will have some level of disengagement which I’ll talk about in a little bit.

Traditionalists, those people who are 70 or older, are seen as being the most engaged in the workforce. Millennials are least engaged at 28.9%. Again, these are just some things to look at.

The number one breaking point for employees is the lack of growth.

Right now Millennials are the biggest generation in the workforce; they see things very differently. Career development and the opportunity to learn and grow new skills is very important for Millennials, so again, we have to look at those things. 

We talked about the fact that we have 69-70% of people disengaged, so let’s look a little bit closer at what that means. There are three levels of engagement - highly engaged, disengaged, and actively disengaged. In 2013, 29.6% of people were highly engaged vs 2014 which shows 31.5% of people are highly engaged. These folks love coming to work. They’re the ones that say “Yahoo! It’s Monday!” They have a deep connection with their people and probably their supervisor and there is just a great sense of fulfillment in what they do. The rest of the group is the disengaged, which in 2013 was at about 51.5% versus in 2014 when it was at 51%. This group is pretty well checked out. They’re sleepwalking through the day, putting in their hours, flying under the radar and not too concerned with productivity. Pretty much what they are is zombies eating your profitability away instead of your brain. It really is a serious thing; they’re coming in at 7:59am and leaving at 5:00pm. So they’re there, but they’re really not there. The actively disengaged group was at 18.8% in 2013 and 17.5% in 2014. Simply put, these people are miserable at their jobs. They’re actively undermining coworkers, sabotaging projects, and are just toxic. 

I’d like to reference a book to you. If you don’t know about this book, it’s called “Love Em or Lose Em" and it is a great resource manual for anybody who is looking to make a serious change in their culture. 

What do you think is the number one reason someone would stay at an organization? 

  • The top 5 reason someone would stay are:
  • Exciting/challenging, the work is meaningful
  • Support from your boss
  • Being recognized/valued and respected
  • Career growth/learning and development
  • Flexible work environment

So, now what? I’d like you to think about this - a lot of us have a perception of who is this person who will potentially be working in my company? We have ideas about how we’d like to see them act, behave, and what skill set we’d like them to have. We have this picture in our mind, but sometimes we end up with someone we’re not quite hoping for.  We need to recognize this because of that labor force participation rate that has affected the amount of people who are working, it means we’re not always going to get the people we hoped to get. Keep in mind again, there is a half a person for every job opening. This means you have to put a lot of emphasis on your people. You need to look at who you have there as well as what your onboarding is all about. So, let’s just talk briefly about what does your welcome mat look like? Engagement needs to start from day one. You need to look at the reputation of your organization. What do those who currently work for you say about your organization? What do you say about your organization when you’re not working? Do you know what your values are? Would you be able to tell someone who was brand new coming into your organization ‘these are our values’? It’s important for us to be thinking about those things because right now there is a lot of competition. It is an employee’s market. Employees can jump and do jump from place to place for the slightest differences. Maybe it’s wages, maybe it’s benefits or the opportunity to grow. 

Come back on Wednesday for part 2.