If scarcity was October's word of the month, uncertainty might be November's.
There are a few things we know for sure in this market: the supply of talent, much like the supply of goods, is low. Demand for both is high, resulting in higher costs of, well, everything. If Jay-Z had 99 problems last year, he has 105.732 this year. Inflation hasn't accelerated this fast since 1982—up 6.8 percent from one year ago— and companies are planning to increase wages by the largest percentage since 2008.
What isn't so clear are the solutions. Will the market self-regulate, will it require help, will prices normalize, will they keep rising? No one knows for sure, but companies can't afford to wait it out. As we'll see in Part III of this brief, many are in search of new ways to ensure important work gets done.
Part I: The National Labor Market Landscape
- On one hand, the establishment survey data used in the jobs report revealed a major miss in job growth numbers (210K added versus the 573K predicted). On the other hand, the household survey data delivered the news we've all been waiting for: labor force participation edged upward to 61.8 percent, the highest rate since March 2020.
- It's also worth noting that initial job growth tallies have been consistently (and significantly) revised upward—and September and October were no exception: a combined 82,000 jobs were added to those initial figures.
- While overall job gains fell short, notable gains occurred in professional and business services (90K jobs added), while retail employment—even in anticipation of a holiday season—declined by 20K.
- Overall unemployment fell to 4.2 percent in November, though the rate still sits higher than pre-pandemic levels (3.5 percent in March 2020).
- October posted a record 11 million openings with only 6.9 million available workers to fill them. Hires to job openings ratios have never been lower.
- And workers continue to take advantage of better offers, higher salaries, and flexible work options. At 4.2 million, October job quits are up 22 percent from pre-pandemic levels.
- Pay rates for non-supervisory workers rose 5.9 percent from a year ago, a 70 percent increase over pre-pandemic growth rates.
Part II: The Engineering and Sciences Landscape
Unemployment rates in engineering and science remained well below overall unemployment levels between September and November:
- Software-Hardware-IT & Mathematics: 2.3%
- Architecture & Engineering: 1.9%
- Sciences—Life, Physical, and Social: 2.2%
Job growth in Actalent labor categories was mixed.
Hiring fell for suppliers of Automotive Manufacturing (down 10.1K) thanks to supply chain shortages. However, demand increased in this category for Controls, Manufacturing, Battery, and Industrial Engineers, along with Software Engineers and Developers.
Scientific Research and Development added 3.3K new jobs in November, an 8.1 percent increase over last year.
Architectural and Engineering also gained in hiring, adding 2K new jobs, a 4.9 percent increase over last year.
Part III: Connecting the Dots
- Rising Salaries. Amid a tight labor market, a supply chain crisis, and the highest inflation in nearly four decades, a new survey by Conference Board revealed companies are planning for steep wage increases in 2022, setting aside an average of 3.9 percent of total payroll.
- Rising Prices. The CEO of Manufacturing Advocacy and Growth Network (MAGNET), Ethan Karp, sat down recently with Yahoo's Morning Brief to talk about supply chain challenges and implications. Long story: it will take a while to sort out how much can be fixed and how much is “permanently screwed up.” With a lot uncertain, there is one thing Karp feels we can count on: prices heading even higher. Businesses are “passing along inflation costs because products are costing more” due to low supply and high demand; however, even if those issues are resolved, Karp doesn't believe companies will lower prices, rather invest in solutions to soften future disruptions and “bake that into their cost structure” going forward.
- New Ways of Working. Gartner, an IT research and consultancy company, surveyed 800 HR leaders on the top workforce changes to result from the talent shortage and COVIDs impact on the labor force. Among some of the top trends identified:
a. Who gets work done. An increase in contingent workforce. More than 32 percent of organizations surveyed are replacing full-time employees with contingent workers as a cost-saving measure, though the HR leaders expressed some uncertainty around how to implement performance management and benefits systems to accommodate this switch.
b. Where work gets done. An increase in remote working. More than 48 percent of employees will work remotely or hybrid, as compared to 30 percent pre-pandemic. And if they can't work hybrid or remotely, many said they'll leave, or have left according to a new LinkedIn Workforce Confidence Index, for somewhere they can.
c. How work gets done. Separation of critical skills and roles. In last month's Market Matters Brief, we alluded to the shift from filling FTEs amid a talent shortage to identifying critical skillsets needed to get important work done. This report reinforced that forecast, with HR leaders reassessing capabilities to meet strategic goals and indicating a need to identify skills that are critical to essential workflows.
Actalent's November 2021 Jobs Report synthesizes information from a variety of sources including the United States Bureau of Labor Statistics survey results, media reports, industry intelligence, company earnings reports, and external labor market data. The full set of data is included as a companion to this article.
If you'd like more information on the data presented, or have questions about the information provided in this report, please contact our team at: email@example.com