Evidence of labor market tightening is seen in declining unemployment rates, rising vacancy durations and less job applicants:
- February unemployment was at the lowest rate since May 2008 and also declined to 5.5 percent from 5.7 percent in the previous month.1
- Economists expect a jobless rate of below 5% by year’s end. 2
- The average number of work days from time of vacancy until a job offer is made has increased to 25.7 working days, an increase of 3.5 days from last January. However, more specialized sectors, such as the information sector hover in the 37 day vacancy range. Also, keep in mind that there is another lag prior to the person starting work after the offer is made.3
- Currently, there are 1.7 job seekers for every job opening, when at the height of the recession there were 7 for every opening. 1
Sixty-three percent of employers cite retaining top employees as their primary compensation objective.5 Some reasons for this high concern are:
- A recent survey by Lee Hecht Harrison states that 48 percent of employees are ready to make a job switch.
- 2015 wage growth, projected to be 2.6% by December, is expected to see the fastest growth since 2008.2
- New hire compensation, in both the manufacturer and service sectors, represented four year highs for the month of February.4
- The number one reason people are leaving in medium and large companies is compensation.5
- The median cost of turnover for most jobs is about 21% of an employee’s annual salary, according the Center for American Progress.
These numbers can be seen as much higher for the pharmaceutical industry. FDA finished 2014 with 41 drug approvals, up from 2013’s 27 and, according to a Reuters report, the highest level of approvals since 1996. The launch and post launch phase of a drug’s life cycle is one of the most resource intense periods for the commercial operations side of the business. In addition, the lack of individuals with science backgrounds has been well documented in recent news.
Thirty-seven percent of positions in professional, scientific and tech sectors will be competitive.5 In order to increase the probability of onboarding these candidates requires outside recruiting services in better securing and negotiating placements.
The picture that all of these statistics paint is one of a job market in which it takes a long time to fill a position and in which some jobs ultimately do not get filled. But there are a few steps you can take now to get ahead of your competition in acquiring the best talent available, such as:
- Enlist the services of a recruiter that specializes in your industry and functional area.
- Work with your recruiter to proactively recruit for positions you expect to fill in the upcoming year.
- Implement steps to retain your current employees
Sources: 1) BLS February 2015 report; 2) WSJ Survey: Economists See 2015 GDP Growth at 3%; 3) Dice-DFH Mean Vacancy Duration Measure, March 2015; 4)Society for Human Resource Management (SHRM) Line Employment Report for March 2015; 5) Payscale, Inc – 2015 Compensation Best Practices Report