What's next for job growth in the U.S.?

At SHRM we have been researching some of the factors that are affecting job growth in the U.S. This is important information for HR professionals who are on the frontline and in the trenches dealing with the filling of jobs. Although there are many reasons that U.S. job growth is very slow, SHRM Research has identified some problematic issues that need solutions from HR professionals.

American businesses are facing a paradox – in the midst of high unemployment and slow job growth, many organizations are faced with inability to fill key jobs in their organizations. In fact the SHRM Leading Indicators of National Employment (LINE) directly demonstrates this effect, showing that HR professionals report continued slowing in the addition of headcount, at the same time as the recruiting difficult index, a measure of how difficult it is to fill key jobs in organizations, is dramatically rising. Why is this happening?

One answer comes from SHRM research that shows gaps between unemployed American workers’ skills and those required for open jobs in the U.S. are a major reason for this seemingly unlikely contradiction. That is, in many industries, high skilled workers are in demand, but supply in particular geographies is very low. Consequently, employers are unable to fill key jobs in their organization. It follows logically that if critical jobs cannot be filled in organizations, then other less critical jobs requiring less skill cannot be created either because the organization’s growth potential is stunted – so, the cycle of low or no job growth continues.

SHRM research also shows that many organizations have cut relocation benefits either completely or to bare-bones programs, making it even more difficult to fill key jobs. Couple that with the fact that approximately 30% of homeowners (who tend to have higher-level skills) are underwater in their homes and cannot afford to move. There is also research showing that as people are laid off from their jobs, they tend to migrate back “home” to areas where they originated and still have family support. This move often takes them away from where the jobs will also start to reemerge first as the economy starts to grow again. Thus, more shortages of skilled workers are geographically created where growth is most likely to begin the revival of the economy.

This situation represents a confluence of many factors that are stunting job growth in a vicious cycle that needs to be broken. HR professionals can influence the course of this cycle if they understand the causes. Creative solutions, such as flexible work arrangements, cooperative consortiums of companies designing skills training programs, collective efforts of companies and community colleges to close skill gaps, or efforts to translate skills of veterans and integrate them into the workforce, are but a few examples of ways HR professionals are starting to rise to the challenge. We invite you to learn more about the causes and how you might make a difference in changing the course of the labor economy in the U.S.

So, what’s next? More stagnant job growth is likely next, but HR professionals can change what’s next through creative and forward looking action.