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Job Growth Much Lower Than Expected: The 4 Real Reasons Behind The US Economic Slowdown

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By kate

September 8, 2021

Economists predicted that the US economy would add approximately 750,000 jobs in August. The actual number, 235,000, was 69% lower than projections, according to Forbes reports. Numbers indicate an economic slowdown, and inflation hawks are pointing at higher wages, and resulting higher prices, coming soon to a marketplace near you. Despite paycheck increases, the number of jobs available in the US has never been higher in this century. The Bureau of Labor Statistics shows that there were 10.1 million job openings as of the last day of June. Meanwhile, there are 8.4 million unemployed US workers, right now. The drastic disconnect is due, in part, to deep concerns over the Delta variant. But the coronavirus isn’t the whole story. True, the trajectory of the pandemic and concerns over vaccination requirements are impacting worker’s willingness to take on jobs. What can companies do to restart hiring, and fill the massive employment gap? Leaders need to take action, today, if this troubling trend is going to be reversed.

 

  1. What If It’s Not a Skills Gap? Upskilling and gaining new capabilities can certainly increase your career opportunities. But what if returning to work isn’t an issue of “how to”, but one of “want to”? Within the gig economy, there are a myriad of ways to make a living – from selling on Etsy to launching a YouTube channel. If employers are going to compete with the world of entrepreneurship, autonomy has to be part of the equation. Unfortunately, many jobs do not offer what psychologists call “an internal locus of control” – the feeling that you are in charge of your own destiny. And, if the job does offer that kind of flexibility, many micromanagers are working against it. The pandemic asked all of us to redesign our lives, making the term “work/life balance” a bit of an oxymoron. Until employers can figure out how to design work around the way people want to live, the disconnect will continue. Meanwhile, as leaders try to redesign the future of work, automation surges forward. In an article entitled, “The Robots are Coming, Is Your Firm Ready?”, Wharton professor and co-author Lynn Wu offers an ominous and startling warning. “How do you change your managerial firm practices so you can get the most our of your robot technologies?” Whew. For a minute there I thought she was going to say, “robot workers.” Perhaps that edit is just a matter of time, especially for lower-level jobs where robots just can’t say no?
  2. Radical Redesign Might Not Be Enough: You could have all the skills in the world, but if the risk of returning to work is too great, your advanced degrees don’t really matter. Employers are striving to create environments that are safe and accommodating. But concerns around issues like child care, personal freedom and safety far outweigh the desire to gain new skills. Plus, for industries like hospitality, and nursing, multiple challenges remain. What if subsidies are one’s main source of income, how does that create an incentive to return to work? “I’m feeling positive about a more balanced jobs market in Q4,” says Andrew Hunter, co-founder and economist at Adzuna. “The winding up of stimulus checks on Labor Day will affect an estimated 7.5 million Americans, which should help to rebalance the scales. So many unemployed workers and self-employed gig workers losing government support will likely trigger a rebalancing of the market as job seekers start to flood back.” Let’s hope so. So far, the 26 states that have already rescinded unemployment incentives have not seen an uptick in employment. Despite Hunter’s optimism, the numbers aren’t trending his way just yet.
  3. Hiring New Employees is Risky: Hiring entry-level digital talent is risky and expensive, according to Edsurge. “Approximately 50 percent of college graduates churn out of entry-level jobs within two years—meaning employers lose new hires not long after becoming productive. It’s expensive due to the possibility of making a bad hire, which can cost up to six digits. But for every tech position left vacant for two months (the average time to fill for tech roles), companies lose an estimated $30,000, despite savings from salary. And this number doesn’t account for the toll on employees—and incremental attrition—from taking on additional work due to understaffing.” Mentoring programs and apprentice-like work environments can help create greater engagement for new hires. How does your organization incorporate mentorship, into the onboarding process? Who is shepherding your new employees, so that you don’t fall into the expensive churn trap that is outlined above?
  4. A Cautionary Tale from Israel: employers and employees alike are considering the state of affairs in Israel. Israel, which often topped lists from Oxford University for most vaccinated nations, now is leading in another category as the nation with the world’s highest one-week rolling average of new daily infections per million people. That’s according to Daily Sabaha Turkish online news source. “This is a very clear warning sign for the rest of the world,” chief innovation officer at Clalit Health Services (CHS), Ran Balicer, told magazine Science in an interview. “If it can happen here, it can probably happen everywhere.”

 

Everywhere, indeed. As 2021 began, the New Year presented new opportunities for increased vaccinations, greater personal freedom, and a return to aspects of work and life that had been removed during the dumpster fire that was 2020. However, the flames are still smoldering. The pandemic has not left us, it has simply changed and mutated. Vaccinations in the US are readily available, but availability and desirability are still at odds. The labor statistics are just one indicator of how the economy is off-kilter right now. The Delta variant remains a clear and present unseen danger, impacting the choices of employers, workers and consumers across the country. For leaders looking to turn the tide on troubling statistics, reshaping the nature of work and providing new strategies for remote teams can help. Upskilling and training can build retention, and mentoring or apprenticeship programs are also good incentives. But are these ideas enough? Perhaps the removal of government incentives can help. Unless, of course, those incentives are around evictions and workers find themselves both homeless, and hunting a job. There is a delicate balance in the workforce today, and no fast answers for job growth are apparent.

Source:  Chris Westfall via Forbes.com

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