The recent Bureau of Labor Statistics report noted some trends in the world of work. As the economy (still) slowly recovers from the recession, jobs are improving, salaries are rising, but unemployment is still staggering behind. Small businesses need to take special note of these movements in employment. While it might make some impact on your competitors, there are important things you need to know and how these trends affect you as a small business.
1. Unemployment rose 5.5%
Keep in mind, this was only a 0.1% increase over the past 7-year low. And yes, a rise in unemployment can be an alarming statistic, but there is always a silver lining. In response to the economic recovery, more people are re-entering the job market to find new and better positions. Not to mention the rise in recent college graduates who are and will be searching for the jumpstart to their life-long careers.
Across the United States, companies plan to increase their hiring of new graduates by 9.6% this year. Even for 2016, the outlook is positive with most employers saying they plan to maintain or increase recent graduate hiring.
Millennials, the recent graduates, are more drawn to small businesses. In fact, 47% of Gen Y workers are employed by small businesses, compared to the 23% employed with companies of over 1,500 employees. Why? They want the ability to develop a great culture and make a difference. You’ll see the benefit of hiring them within just a short time as they are ambitious, tech-savvy, and forward-facing employees.
2. Salaries increased 2.3%
The viral discussions of employment compensation have made an impact. Over the past month, wages rose 0.3%; more impressive, over the last year they rose 2.3%. That is the most employee wages have risen since mid-2013. While you might have to pay your employees or new hires more than you expected, remember, you’re paying for quality candidates. Myles Udland (@MylesUdland), Business Insider’s Markets Editor, commented on the report, saying:
“Overall, this report was a bit of a mixed bag but shows a labor market that is still adding workers while wage pressures - a missing element of the labor market that the Federal Reserve had been looking for - are starting to make themselves known.”
Wages overall have increased, and while a higher salary may make your company more competitive than your talent competitors don’t pay employees beyond your means. They need the security of their paycheck as much as you need the security of their position. If the wages aren’t enough to make your business competitive, find other ways to attract candidates through company culture or development opportunities.
The viral discussion of employee wages has made an impact and could influence your small business too...
3. Available jobs increased
Take a look at March this year… the number of available new jobs was just over 100,000. Now, look at May. Over the last few months, employers have increased their number of new jobs by 280,000 - the biggest gain since the end of 2014 and nearly 60,000 more than economists had thought.
Your small business, as a result of the economic recovery, has probably gained business and, therefore, a larger workload for your employees. You now have the capability to hire more employees and retain that workload. Take a chance and join the employers who have created new positions.
In light of the new report from the Bureau of Labor Statistics, your small business needs to prepare to hire recent graduates and pay (perhaps in culture or benefits if not monetarily) them in accordance with the recent wage increase. You have the information to grow your team, all you need is a company that will help develop your talent management system so you can efficiently lead your new small business team.