The U.S. labor market has undergone significant changes in recent years. Most considerable, the unemployment rate is currently under 4 percent, the lowest it’s been in 17 years. And the shifting market has also created a demand for jobs requiring higher-level social and analytical skills, resulting in a widening skills gap.
These two factors combined make it very difficult for employers to find the talent they need to be successful. Employers want certain skills to help grow their businesses, but their current team and the available workforce don’t have them.
However, this creates a very favorable situation for employees. You now have a unique opportunity to position yourself to take advantage of this widening skills gap and tight labor market.
Below, we’ve given you some background on the changing employment market and tips for you to become a more attractive employee and improve your career outlook.
Tl;dr – if you are time-strapped and want a quick summary, we’ve included a simple, bulleted summary at the end of this post.
TODAY’S EMPLOYMENT MARKET
There are two main factors that have changed the employment market today and have put candidates into the driver’s seat: the low unemployment rate and the widening skills gap. So let’s dive into what exactly these two things mean for employees.
LOW UNEMPLOYMENT RATE
In the past, employers had an upper hand. The unemployment rate was nearly 10 percent in 2010 and employers had their pick of highly skilled candidates. Job seekers often had to accept the first job they were offered, without much room for negotiation.
Fast forward to today and the national unemployment rate is under 4 percent and the labor market is unusually stretched. Job seekers and passive candidates now have more opportunities available to them and can be selective about which positions they consider and accept.
But it’s not just active job seekers that benefit from a low unemployment rate. Happy employees can position themselves for growth with their current employer or explore new opportunities at other companies.
In fact, recent statistics released by the US Bureau of Labor Statistics, reveal that a large number of job seekers are leaving their employers. Numbers from June show that 3.4 million Americans quit their jobs that month – the highest “quits rate” since 2001.
And employees don’t quit their jobs if they think it will be hard to find a new one. There’s a wealth of opportunity out there for skilled employees.
THE WIDENING SKILLS GAP
The labor market is also experiencing a skills gap and certain jobs and industries are feeling the effects more than others. While the skills gap makes it harder for employers to find top candidates, it benefits employees with advanced skills and experience. The skills gap even benefits employees who are willing to learn new skills to advance their careers.
A large part of the skills gap comes from a shortage of people in the science, technology, education and math industries. Technology and the world of work are changing so quickly that it is difficult to find employees with experience in emerging technologies and work practices.
There has also been an increased demand for these types of positions. In fact, IT jobs have increased substantially over the past two decades, with IT-intensive occupations growing by 19.5 percent between 2004 and 2017. On the other hand, less IT-intensive occupations only grew by 2.4 percent over the same period.
But the technology and STEM industries aren’t the only ones being affected. Research by CareerBuilder found that skills gaps exist across all industries and occupational categories, with 45% of businesses suffering in productivity and 26% losing revenue due to the skills gap.
There’s an extreme shortage in critical areas like strategic relationship building, complex selling environments, analytics, and big-data-oriented marketing roles. Demand for roles like Data Scientists have increased immensely. As recently as 2012, the BLS showed data scientists had no gap at all as an occupation, but now have risen to 1.2 openings for every worker. These roles are essential to business success but are hard to source for and find candidates with the right experience.
Additionally, there’s a skills gap in soft skills like critical thinking, communication, time management, collaboration, and advanced leadership skills.
Employment in jobs requiring average or above-average levels of social skills, such as interpersonal, communications or management skills, increased 83% from 1980 to 2015. Meanwhile, employment in jobs requiring higher levels of analytical skills, such as critical thinking and computer use, increased 77%, according to Pew Research.
HOW TO TAKE ADVANTAGE OF THE CURRENT MARKET
Find out how you can use the low unemployment rate and skills gap to take charge of your career path and create new opportunities for yourself.
AIM HIGH
It’s no secret that companies are strapped for leadership talent. In a 2011 Bersin & Associates study, more than half of organizations reported their business was being held back by a lack of leadership talent.
And today, of the 44 million Baby Boomers that are still working, about 10,000 Boomers are retiring every day, according to InvestoPedia.
This leaves a big opening for younger generations to advance their careers. As leadership positions start coming available at your company, you can move into these roles and increase your compensation along the way.
Even if you don’t have any current leadership experience, find creative and innovative ways to get things done in your current position. Take on more initiative in your current role and develop successful practices in your company.
Companies can’t afford to leave these critical roles unfilled for very long and might be willing to hire employees who don’t have all the necessary work experience. Many companies are also providing mentors and training programs to help candidates quickly get up to speed in new roles they’re not 100 percent qualified for.
DEVELOP YOUR SKILLS
As we mentioned in the widening skills gap section, there are certain industries and jobs that are showing a lot of job growth right now that will continue into the future. There are also certain skill sets that are in demand and soft skills that employers are looking for when hiring candidates and promoting their current team.
You can use this information to start assessing and evaluating your current capabilities. If your skills are becoming out of date or are lacking in some areas, now is a good time to focus on the skills that meet the changing needs of companies and the market.
And you don’t need to reinvent the wheel either. Look for some natural transitions that might occur in your field. For example, if you’re a sales rep, you could consider expanding into different product categories that are growing. Or if you’re a marketing professional, you could focus on strengthening your analytical and digital marketing skills.
Matching your career learning to the growing skills in the market will help make you a more valuable employee. In turn, you can leverage these in-demand skills to find better opportunities and increase your compensation.
PURSUE OUTSIDE OPPORTUNITIES
If you’ve been thinking about making a change, now is the time to do so.
The average raise for employees was about 3% in 2014. But, the inflation rate is currently 2.1% calculated based on the Consumer Price Index published by the Bureau of Labor Statistics. This means that your raise is actually less than 1%.
On the other hand, the average raise an employee receives for leaving is between a 10% to 20% increase in salary. Use this job seeker’s market to your advantage and find a job with a decent pay increase.
And if you’re not sure what you’re worth, use sites like Glassdoor to research salary info or download compensation guides. The more informed you are about competitive salaries in today’s market, the more you can negotiate and get the compensation you deserve.
DON’T ACCEPT THE COUNTER OFFER
During this candidate drought, employers are much more willing to provide higher compensation and benefits to retain their top employees.
But if you’re willing to explore new opportunities, then you need to be prepared to leave if the right offer comes around.
Take this time to think about what you really want in your new position. Is it a better company culture? More responsibility? Accepting the counteroffer from your current employer limits your growth and opportunity during this candidate driven market.
While you still might be tempted to take the inevitable counter-offer, just know that doing so never turns out well.
Here are just a fraction of the reasons why you shouldn’t consider a counter-offer:
- 80% of candidates who accept a counteroffer from their current employer end up leaving within 6 months
- Your boss has panicked and may simply be buying time until they can find your replacement
- It shouldn’t take a counter-offer for your company to recognize your contributions and to start compensating you for what you’re worth
- Your counter offer is likely the only pay raise you will see for a while if you stay with your current company
- You will have lost trust with your employer and it’s unlikely they will welcome you back with open arms
- Accepting a counteroffer doesn’t change the factors that drove you to consider new opportunities in the first place
In the end, you will have lost trust with your current employer and missed out on an opportunity that could have had the potential to better your career.
CONCLUSION: DON’T TAKE THE MARKET FOR GRANTED
Just as we saw a shift from employer to candidate market, the employment market won’t always favor candidates. If you want to apply for your dream job or advance your career by learning new skills, then now is the time to do so.
IN REVIEW (tl;dr)
Today’s low unemployment rate and widening skills gap makes it very hard for employers to find the talent they need. Happy employees can take advantage of this unemployment market by:
- Pursuing leadership opportunities in your company
- Developing in-demand skills and looking for natural transitions in your field
- Applying for opportunities outside your company to increase your earnings
- Declining any counter offers from your current company
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