On the Job Front

 On the Job Front

By the Numbers

There is a lot of numbers on the job front.  Unemployment is going down, jobs are being created, employers cannot find workers.  Workers can't find jobs, workers won't find jobs. These all seem so contradictory.  

And they are.  The only thing the conflicting agendas can agree on is the economy is in a serious churn. And so there are numbers to support every position. 

At the gym, two different news channels.  "559,000 added to the payrolls", which on any other month would be great news, and on the other display the headline reads "-7.6 million since Feb, 2020".    

I do not believe that companies that added 559,000 jobs in a month are not able to find workers.  And I do not believe  "Generous unemployment benefits" kept those workers from seeking, and securing a position.  For those half a million jobs, employers and workers came to an agreement, and are now back in the races.

It's companies that refuse to acknowledge the world has changed.  They are doing things the way they used to, and workers are not accepting it.  Because, in addition to  "Generous unemployment benefits", people have reduced their expenses to a minimum, and are not as desperate to purchase that new toy.  

We survived 16 months of isolation, we can wait a little longer for reality to hit. 

After the Spanish flu pandemic. Wages went up significantly, from below a dollar an hour to about 1.75/hour by 1922.  Employers were desperate for workers, even with a flood of returning soldiers from WWI.  

After the Black Plague worked it's way through Europe.  Wages went up significantly as well.  We are seeing the signs now.  Efficiency has gone up.  So corporate costs are down.  Some of them are using that efficiency to hire top talent at a good price.  Others are waiting for the price of the talent to go down, and they now are complaining when it is not available or sub standard.

Many businesses are trying desperately to fight a rise in the minimum wage.  Many of them may not even have employees making minimum wage on their payrolls.

Why?  Because in this country, you do NOT get what you earn.  You get what you negotiate for.  And negotiation is not a skill set for many.  It certainly isn't one of my best skills.  So you have to start at a number.  And there is an axiom in negotiation.  The first person to put out a number has lost.  And if you find negotiation makes you uncomfortable, that number is out there for you.  

It's $7.25/hr.  That is the number you have to justify in your negotiations that you are worth more than.  Are you worth double minimum wage?  Triple?  Quadruple?  

And someone making $22/hr is doing fairly well on that scale and is probably happy.  But if the minimum wage is now $15, he has to start thinking that he is underpaid and deserves $45/hr.  And he is probably right to do so.  Employers don't want to go through that hell.  

But that's ok, because some other company will pay him $45/hour now.  Or close enough as to not matter. 

That is another reality in today's world.  The only way to get a good raise is from another company. This has been true for decades, but it's going to be more true now.

Employers that hire the talent now are going to succeed, the ones holding on to the old scales are doomed.

Here is my perspective.  I am a contractor.  My previous position ended on 12/2019.  I took a month off, and then the world changed...

I am used to finding work.  I have been doing it since 2004. My skill sets are in high demand, and I am at the top of my field.  Normally it takes me 6 weeks between positions.  

And the positions were being posted, all through Covid I was receiving prospects.  Companies with self described "Urgent Needs".  And I applied and received very few replies.  I probably applied to over a 1,000 positions in 16 months.  And that is not an exaggeration.  I had talked to recruiters and asked what's up?  They all said the companies are not answering back.  They put out requirements, accept names, and nothing.  

So why were companies putting out requisitions?  They think they were building stables of available talent.  So a thousand companies think I'll be available when they are ready, All of them were disappointed.  I still get a dozen prospects a day.

Now we have another case.  A young man, talented, some experience, and a degree in business from a major university.

He can't find a job.  Employers are not calling back.  The same employers that complain they cannot find workers, but ignore the prospects that are answering them.

One explanation is they are used to a lower wage, and don't want new hires locked into a higher tier.  But then the question is, why put out the requisitions at all?  

I don't believe in conspiracies, especially if it covers 10's of thousands of entities.  So I'll look for environmental behavior drivers.  

My current theory is information overload.  If you put out an Facebook ad looking for workers for your company, how many replies did you receive? On the low end 100's.  Could be 1,000's.  On the company's end there is one guy.  How many will he reply too?  10 a day? How many can he interview?  How many are qualified?  This could all be down to percentages.  

Call it chaos theory, or call it luck.  

So the companies that adapt to the new environment will get a head start at this new race.  The others will fall behind.  

So if you are an investor, I would look at a company that complains it cannot find workers and use that as part of the decision tree not to invest.  And look for companies that are quietly moving forward.  

There is no guarantees here, but frankly, they had 16 months to prepare for reopening.  Those that failed to plan on new on-boarding are now flailing in the economic churn.  To those that did plan, the talent is available in numbers, ready for the picking.

Just my 2 cents.