The job market in today’s economy continues to prove the power employees hold. The Bureau of Labor Statistics reports 2019 closed out with a 50 year low unemployment rate of 3.5% and a whopping 7.3 million job openings. This means the majority of open jobs will be filled by employees who are currently working.
Everything in business is affected by supply and demand. If it doesn’t rain, wheat and corn don’t grow and the price of each increases. Tires become more expensive and manufacturing moves home when trade limits are put on rubber. As supply is limited and demand for employees increases, employees have and will continue to have increased choices in where they work.
Because of these increased choices employees have and the direct costs associated with replacing an employee, organizations can not afford to let employees leave for preventable reasons.
When employees leave for another job their former workplaces suffer from unnecessary turnover, unfilled positions, lost customers, overworked staff and compromised profit. Employee morale is flat, clever but empty perks continue to fail and everyone knows that employee engagement scores are meaningless. Poaching is the new best practice and employees are bailing on their current employer.
The fact is employees have control in this high stakes job market and this employee-in-control market will continue.
It’s simple demographic science that U.S. workers will hold the hammer for years to come.
Baby Boomers represent 78 million Americans who have retired or are preparing to retire from the workforce. The next generation (Generation X) only represents 69 million Americans which is 11.5% smaller than the Boomers. Generation Xers saw their parents and neighbors fired during the headline making downsizings of the 80’s and 90’s, the employment contract changed forever, pensions disappear, 401k and health benefits transfer-ability became standard practice, and lifetime loyalty to and from a company increasingly disappear from the economic landscape.
The next generation known as Millenials represent 79.5 million actual and potential American workers. They will continue to live in an employee’s market. The low birth replacement rates in Eastern Europe, the European Union, and Asia, along with current trade and immigration policy will likely drive manufacturing and other previously outsourced industries back to the United States. Infrastructure budgeting and implementation decisions will further compromise worker availability. The American workplace is not ready for this.
Employees don’t need their current employer, but companies need their employees. Companies can and must become better employers to retain their workforce and hire to fill open positions.
These are the conditions we face and the reason why EmployER Engagement: The Fresh and Dissenting Voice on the Employment Relationship was written. EmployER Engagement is for organizational leaders who are willing to innovate their people strategies to stay ahead of their competition, and for organizations that are tired of the poor ROI received from conventional employment relationship practices.