Attendees took a deep dive into a sea of numbers on Day 2 of the ERE Recruiting Conference & Expo at the San Diego Convention Center.
Keynote speaker Tara Sinclair, an economics and international affairs professor at George Washington University, delivered an address titled a “A Recruiting Leader’s Guide to Key Workforce Trends and Economic Indicators.”
From her desk in Washington, “inside the sausage factory of economic data” as she put it, Sinclair tracks everything from NFP (Non-Farm Payroll figures) to JOLTS (Job Openings and Labor Turnover Survey) data in an effort to better understand the trends about the economy.
“But the most watched-government data are old news,” she says, referring to those figures. “They’re not telling us where the economy is going, they’re telling us where the economy was.”
The latest job numbers, she said, are coming back to pre-2008 recession levels, but slowly.
“Don’t just look at the initial numbers for previous month, but also look at the revised jobs number for the month before that as well.”
While economic forecasts may do well on average, she said, “they can fail miserably at key times. We really had no idea, one year in advance, or even one quarter in advance, what was coming.”
Indeed, in May 2009, the forecasts overestimated U.S. jobs by 7 million, she said.
“So when you include forecasts in your plan, leave some space because when the economy changes, the models will fail.”
While she acknowledged that no single series, or even a set of series, should be trusted about the others, she nonetheless offered three sets of figures recruiting leaders may want to start following in order to get a better sense of just where the economy may be headed in the coming months and years.
1. Quits rate (from JOLTS): The Bureau of Labor Statistics calls this figured a measure of a workers ability or willingness to leave their job.
“It’s a great number to watch”, she said, but added that the figure wasn’t being tracked until 2000.
Unsurprisingly, the quits rate dropped off dramatically between 2007 and 2009 as the full effect of the recession was being felt. From 2000 to 2007, the average rate was 2.1 percent , while the 2008 -2013 average hovered around 1.7 percent and is now slowly rising, she said.
“The reality of what we’re facing going forward is that we are going to be looking at a lot more people willing to leave their job as that number goes up as the economy improves,” she said.
2. Unemployment Insurance Initial Claims
“If I had one series to take to a deserted island and still continue forecasting,” Sinclair said, “I would take this one. It’s perhaps the best single variable to forecast the direction of the economy. We get it every week from Department of Labor, so it’s timely, and we get a sense of how many people have been signing up for unemployment insurance over the past four-week period.
“It’s a great signal for when the economy is going to turn and be quite different than it was,” she said.
3. Employment to Population Ratio
Sinclair calls this data “the most dramatic graph of the U.S. labor market today.”
The numbers have plummeted since the end of 2007 and it’s not really coming back up, she said, adding that we’re now “actually stuck at mid 1908s levels.”
But is this a result of an aging work population in which baby boomers are retiring en masse?
“If you change it from ‘population’ to ‘working-age population’ the graph largely remains the same,” she said.
So where are the hidden pockets of talent? Sinclair offered the attendees a group of sources that may yield quality hires for organizations: career changers, flexible workers and what she called “movers,” people willing to relocate for a job. She noted a survey found eight out of 10 millennial workers are willing to move for their first job.
Another survey Sinclair cited found less than 50 percent of those currently employed are actually looking for jobs in their current occupation.
“Overall,” she said, “job seekers like to change careers.”
As for flexible workers, the low-inflation economy may make it difficult for employers to differentiate themselves based on wages, “but offering flexibility may be a good way to attract that talent.”
While overlooked for many years, the long-term unemployed are another avenue that may lead to quality hires, she noted. “There are 3.7 million long-term unemployed, and those people are very similar in experience to both other unemployed AND employed workers, but these people are not getting callbacks. It’s a population to look at.”
And, the college professor noted, don’t forget the new grads, as there will be 24 million students enrolled in higher education by 2022.
Economic data may not be perfect, Sinclair concluded.
“But you need to know where the overall labor market is heading. So be prepared for a much tighter labor market in 2015 and beyond.”