Providing Workforce Planning Data to Support European Call Center Recruitment
Call center recruitment is essential for any enterprise in today’s customer-centric environment. A large multinational financial services provider identified five European countries where they could potentially open a bi- or tri-lingual contact center. They turned to PeopleScout—and our Talent Insights solution—to get the data they needed to understand which location had the best talent pool for their needs.
Labor market data provided for five countries
Provided data on size of talent pool and language capabilities
Added value with data to support DE&I and more
Situation
With dozens of contact centers in countries around the globe, the financial services organization wanted to simplify and optimize their operating model with multilingual hubs. The client asked PeopleScout to help them understand more about five shortlisted potential locations for these “super sites.” Time was of the essence with delivery of the insights required in just two weeks.
Solution
Our in-depth talent insights included:
Size of talent pool – The number of individuals working in the customer service sector in those locations
Languages spoken – The languages spoken by the talent pool within those locations
Cost of language ability – Any additional cost to hire people with particular language abilities in those locations
Demographic data – Age and gender data to support diversity, equality and inclusion (DE&I) efforts as well as recruitment marketing messaging
Drivers and motivators – For candidates in each market to inform go-to-market messages that will resonate with each audience
Channel strategy and advertising tactics – To attract these audiences on their go-to websites and job boards
Candidate expectations – What candidates want from the recruitment process to enable an improved candidate experience
Salary expectations – How the employment offer might need to vary from location to location based on regional information
The Results
The PeopleScout Talent Insights team distilled their research into an easily digestible report. For each country, the report included:
A high-level summary of our findings and recommendations
An overview of market size broken down by active and passive job seekers
Highlights on “hot spot” locations within each country showing language capabilities and salary expectations
What customer service professionals are looking for from an employer
Job boards and websites favored by candidates in each country
Demographic details including gender and age as well as education and experience levels
Expectations for the candidate experience including timelines, number of interviews and likelihood to negotiate offers
The insight PeopleScout provided for each location equipped the client with valuable information that helped confirm the suitability of a location for their multilingual contact center. We were also able to provide them with additional analysis to define their proposition, shape their talent attraction strategy and inform their salary and compensation packages.
At a Glance
COMPANY: Global financial services organization
INDUSTRY: Financial Services
PEOPLESCOUT SOLUTIONS: Talent Advisory
ABOUT THE CLIENT: This multinational insurance and financial services company offers personal and professional insurance products as well as asset management solutions.
The job market and the world of work have changed drastically in the last few years, leaving employers to deal with the new challenges. For example, in the U.S., there are currently more than 11 million job openings, and year-over-year wage growth was at 5.2% in May. On top of that, the Great Resignation has record numbers of workers leaving their jobs: In the last six months in the U.S., more than 4 million people left their jobs each month. And, it’s spreading across the globe; CNN reports that resignations have also jumped in countries like the United Kingdom, Australia and France.
But, employers are dealing with more than just a tight talent market, increased turnover and rising wages; the world of work has changed permanently—and so have candidate expectations. For instance, nearly two-thirds of the workforce wants some form of remote work option and nearly one-third wants hybrid work. As such, employers can’t simply plan to return to the pre-pandemic ways of doing business; instead, they must adapt.
More precisely, to succeed in this job market, you need to both hire the best talent and retain the workers you already have—and that requires multifaceted solutions that address the specific issues within your organization. In this article, we’ll cover the potential sources of your talent challenges, some signs that they may be negatively affecting your organization and strategies you can use to get ahead.
Is Your Employer Brand on Life Support?
Throughout the pandemic and initial recovery, many organizations didn’t have the resources to invest in their employer brands. Unfortunately, if this was the case for your organization, it may be affecting your ability to recruit top talent. That’s because, if your employer brand is weak, qualified candidates won’t apply because they simply have other options.
So, how can you tell if your employer brand is holding your organization back? Watch for these warning signs:
Solution: Rebuild Your Employer Brand
If any of these signs look familiar, it’s time to focus on your employer brand. Luckily, there are a few things you can do. The first is to build out a strong employer value proposition (EVP) as the foundation of an employer branding campaign.
It’s important to note that building a strong EVP to drive your employer brand requires research into the short- and long-term goals of your organization; the reality of what it’s like to work for you right now; and the outside perception of your organization. That information is distilled into an EVP that’s unique, aspirational, authentic and dynamic. From there, you can communicate your message through an employer branding campaign via your careers site, social media campaigns, hiring events and more.
At PeopleScout, we supported work on the employer brand at Vodafone, a telecommunications company in the UK. In this case, consumers knew the brand well as a mobile phone retailer, but didn’t see it as a multifaceted tech innovator. So, to help Vodafone hire more young workers, we worked to create an employer brand campaign that captured the spirit of change and possibility that’s part of their EVP. At the end of the project, PeopleScout had generated more than 16,000 applications and increased the number of female candidates by 23%.
Does Your Candidate Experience Leave Much to be Desired?
If your employer brand is in good shape, but you’re still struggling to hire qualified candidates, the next area to evaluate is your candidate experience. Candidate experience has always been important, but it’s even more critical in today’s job market. Nowadays, people have plenty of other options, so they won’t take the time to complete a long application or wait weeks for a call back.
How can you tell if your candidate experience is the cause of your hiring woes? Look for these signs:
Solution: Update Your Talent Tech Stack
The right technology can have a significant influence on your candidate experience. Candidates want the recruitment experience to be fast and easy and allow them to feel in control. For this reason, evaluate every step of the candidate journey to identify where you can make improvements with technology.
Your first step is to look at your application. Have you tried filling out your own application recently? How long does it take to complete? Is it simple or does it feel drawn out and tedious? Can you complete the application on a mobile device? If the process takes a long time or requires a desktop computer, it’s time to update your application.
Then, look for other points in the process where you might make things easier for candidates. Do candidates have to wait weeks to schedule a screening or interview? If so, consider adding a self-scheduling interview tool or virtual interview solution, like text interviews or on-demand interviews. Furthermore, adding something as simple as a status bar that shows candidates where they are in the process can help them stay engaged.
At PeopleScout, we work with a large retailer that had a strong consumer brand, but still struggled to recruit candidates. Their application required a computer and took more than 30 minutes to fill out. As an alternative, we developed a mobile-first application with just 11 questions that took less than eight minutes to complete. Now, half the candidates apply on mobile devices and the application conversion rate rose to 85%. For comparison, employers using a traditional application have an average applicant conversion rate of just 35%.
Are Your Offers Competitive Enough in the Job Market?
Salary and benefits are the elephants in the room in any discussion about hiring challenges. Wages are rising significantly. While the average year-over-year salary growth in the U.S. is at 5.2%, some industries are experiencing even steeper wage growth. For example, in the leisure and hospitality sector, wages are up more than 11% in the last year. In fact, the World Economic Forum reports that wages are rising in every region of the world. Therefore, in the current job market, your offer needs to be competitive.
Here are some signs that your offers may not be competitive enough:
Solution: Adjust Your Compensation to Current Job Market Rates
If you’re experiencing any of these warning signs, evaluate your compensation against the market and adjust where necessary. Due to remote work, the job market has changed. Now, you’re not just competing against employers in your area for talent; you’re competing for talent across the country and, in some cases, the entire world.
To that end, an RPO or MSP provider can help advise you on market rates and what types of adjustments are needed to make your offers more competitive. Plus, increasing your wages could even save you money in the long run.
This happened for one PeopleScout client, a major rural healthcare system. Hit hard by the ongoing nursing shortage, the healthcare organization was relying on expensive travel nurses and struggling to bring in enough candidates. PeopleScout advised the provider to implement a $10,000 hiring bonus. This resulted in a cost savings as the client was able to reduce its nursing recruitment spend by 77%, totaling more than $4 million. The client was also able to reduce its use of traveling nurses by 68% and experienced its lowest-ever nursing vacancy rate—just 1.3%.
Does Your Company Culture Send People Running?
Perhaps the best way to avoid staffing shortages is to ensure that you don’t have to backfill large numbers of roles due to turnover. The Great Resignation is in full swing, but employers shouldn’t just throw their hands in the air as employees leave for new jobs.
The good news is that employee turnover isn’t just about money. Talent leaders are finding that a major driving factor is employee disengagement. Throughout the last few years, many employees have experienced negative effects on their mental health, causing burnout and driving a reevaluation of work/life balance. Conversely, company culture can play a huge role in keeping employees happy, healthy and engaged.
Is your company culture a problem? Watch for these warning signs:
Solution: Determine What Employees Want in the Job Market & Meet Their Needs
To improve your company culture, you must first determine what employees feel they’re lacking from your organization. You can gather this information in two ways—and both are valuable. First, you should be conducting exit interviews with employees who have resigned. Try to get an idea of why they decided to take a new role. Is it simply increased pay? Did they feel they lacked a clear career path at your organization? Did they not feel appreciated by managers and colleagues?
Next, try to identify problems before they drive employees to leave. You can accomplish this through anonymous pulse surveys; there are a number of tools you can use to track employee engagement and look for areas of improvement. Do employees want more opportunities for training? Do they want to feel as though they’re part of something bigger? Do they feel as though company leadership is not addressing their concerns?
Then, once you determine the biggest pain points for employees, make targeted improvements to your company culture. You can demonstrate appreciation for your workers in tangible ways: Communicate actively and often. Define paths for advancement and look at learning and development programs. Offer more flexibility. Provide training for managers. Not only will these kinds of investments keep tenured employees from leaving, but they can also improve your employer brand and make your employment offers more competitive.
There’s no doubt that the current talent market is difficult for employers, but the sources of the struggle are multifaceted and complex. There isn’t an easy, one-size-fits-all solution. Employers need to evaluate both the candidate and employee experience and alter their processes where inadequacies reveal themselves. You can’t keep waiting for “things to return to normal.” We’re in the new normal, and we have to adapt. To learn more, check out our ebook, “Employer Brand: Helping the Right Talent Choose You.”
U.S. employers added 372,000 jobs in June, beating analyst expectations. The unemployment rate remained at 3.6%. Year-over-year wage growth softened but remained high at 5.1%.
The Numbers
372,000: Employers added 372,000 jobs to the U.S. economy.
3.6%: The unemployment rate remained at 3.6%.
5.1%: Wages rose 5.1% over the past year.
The Good
The 372,000 jobs added in June demonstrate the job market remains strong despite inflation. Though the latest numbers come in lower than the 400,000+ jobs that had been added in recent months, the latest numbers are still good news. The Wall Street Journal reports that experts expect the strong hiring numbers to continue, especially in the leisure and hospitality sector, as consumer demand for travel and restaurants remains strong. The 3.6% unemployment rate is also good news. The number has held for four months, suggesting that the labor shortage is starting to ease.
The Bad
Despite the good news, there are some concerning signs in June’s report. The labor participation rate, which has yet to recover to pre-pandemic levels, fell to 62.2%. This is the second time in the past three months that the labor participation rate has fallen. As MarketWatch reports, this leaves the workforce short of about 1.5 million workers. While the unemployment rate points to some easing of the labor shortage, the labor participation rate indicates that there is still a long way to go.
The Unknown
With the mixed economic news, experts will be watching closely to see if the Federal Reserve’s strategy of raising interest rates will work to tame inflation while maintaining strong job growth. The New York Times reports that the economy faces several large challenges. High prices are restricting consumer spending, the labor force is aging and low immigration slows the growth of the labor force.
At PeopleScout, we’re committed to providing you with information to help guide your talent acquisition decisions across the globe. This article is part of our series identifying talent trends across the globe.
Asia Pacific (APAC) is home to more than 4.7 billion people, as well as some of the largest global economies. And, because it’s made up of more than 50 countries and territories with varied cultures, languages and job roles, it’s impossible to leverage the same talent acquisition strategy across countries.
APAC by the Numbers
However, according to the International Monetary Fund, APAC is also the fastest-growing region in the world and, as such, represents a huge opportunity for global enterprises to capitalize on this diverse talent pool. For this reason, it’s imperative for organizations to understand the skills shortages, demographic gaps and pandemic recovery challenges throughout the region.
In this article, we’ll cover some of the labor market trends in APAC. We’ll also point out what multinational organizations should be aware of when it comes to immigration, education and diversity, as well as their effect on talent acquisition in the region.
Pandemic Recovery Continues to Vary Across APAC
The COVID-19 pandemic recovery continues to lag behind in Asia. For instance, China is still enforcing its “zero-COVID” policy, while Shanghai and Hong Kong are dealing with spikes in infection numbers and deaths, which is delaying border openings and stifling employment recovery—particularly in economies that are dependent on tourism.
In Australia, the unemployment rate is at a record low of just under 4% as of May 2022, and it’s expected to drop even lower. However, the country is also experiencing an acute labor shortage: The closure of Australian borders during the pandemic meant that overseas migration to the country was negative for the first time since 1946. Pre-pandemic, one in 10 workers in Australia was on a temporary work visa. Then, as lockdowns went into place, hundreds of thousands of workers with temporary visas had to depart Australia—leaving a record number of jobs vacant. Accordingly, with only the local labor pool to pull from, unemployment dropped and vacancies soared, tripling in the retail and manufacturing sectors from 2020 to 2021.
Then, in December 2021, the country’s borders reopened to students and migrants with visas, which is helping to fill positions—especially among casual jobs in retail and hospitality. Now, many Australian organizations are looking to new talent pools, including tapping into globally dispersed talent. As an example, PeopleScout recently helped a hospitality client take advantage of a visa strategy introduced to attract chefs to Australia’s tourism industry: Through a Recruiter On-Demand solution, we were able to source chefs in the United Kingdom who were willing to relocate.
With a large and complex country, the knock-on effect of the pandemic on the Australian labor pool is still yet to be seen. Yet, CEOs in the country are optimistic, with 88% expecting growth in the Australian economy.
Global Hiring: Key Takeaways for Employers
Shifting Demographics Affecting Talent Pools and Global Hiring
Across APAC, many countries are facing labor shortages due, in part, to aging populations and the accelerated rate of retirement during the COVID-19 pandemic. However, Gen Z makes up 25% of the APAC population—and they’re keen to have an influence.
Meanwhile, in another part of Asia, India is experiencing a talent surplus: While most countries have seen a post-pandemic drop in unemployment, India is experiencing a decline in jobs, with an unemployment rate of more than 7.8% in April 2022. At the same time, the Indian workforce grew by 8.8 million people in April; so, even with unemployment dropping, available jobs are still not enough to satisfy the demand for work.
In 1991, the Indian government made sweeping reforms to its industrial and trade policies, which led to greater foreign investment due to its youthful population. As a result, India went from a primarily agricultural economy to a services-led economy with a boom in IT-related jobs. Consequently, there are now fewer lower-skilled jobs to absorb the large number of unskilled or low-skilled workers.
Moreover, the vast majority of jobs in India are informal: Just more than 2% of Indian workers are in secure jobs with access to benefits like retirement savings and healthcare. Therefore, these high unemployment numbers could be influenced by the number of educated young people who can afford to remain jobless while they find desirable work, rather than take low-paying positions. On the other hand, the poor—who have limited access to education—are forced to take any work they can get, which often involves pursuing unstable, daily-wage laborer roles in manufacturing and construction.
Key Takeaways for Employers Exploring Global Hiring and Recruitment
Tech Investment is Up, but Women are a Missed Opportunity
The technology sector is having a significant influence on global hiring strategies and talent trends in the APAC region: India is home to the largest tech companies, like Wipro, Infosys and HCL. The growth of the Indian IT industry has also created more than 16 million jobs that drive the digital transformation for global enterprises offshoring their IT and R&D functions to take advantage of India’s less-expensive software talent. To keep up with the demand for tech talent, STEM university grads have more than doubled in India. Yet, despite IT being a top interest for 21- to 25-year-olds, there’s still a talent shortage.
What’s more, with global enterprises embracing Indian talent, the country has also become a gateway to other markets in Asia. Now, $1 of every $2 in global investment goes to companies in Asia, some of which is fueling their own talent pools. For example, tech giant Apple has committed to building three Developer Academies in Indonesia, which will each produce 200 iOS developers annually.
Meanwhile, as a long-time leader in innovation, Japan’s high-tech and renewable energy sectors are the most profitable industries in the country. As a result, the Japanese education system is now adjusting to keep up with the demand for digital and software skills: In 2020, computer programming languages were introduced to elementary curricula. However, not all countries in APAC are stressing technology education. In Australia, only 3,000 to 4,000 IT graduates enter the workforce each year, which won’t meet the need for 156,000 new technology workers by 2025 to ensure that economic growth is not stalled by skills shortages.
Any company looking to remain competitive—especially those in the manufacturing or technology sectors—must emphasize becoming a top employer in APAC. And, one talent pool they could look to attract in Asia is women. Diversity and inclusion is one area where the wide variety of cultures across APAC shows itself, but the region scored highest on the importance of maintaining gender roles. Of course, it varies from country to country but, in patriarchal societies like Japan and China, females are often underrepresented in the workplace due to traditional views about women taking care of the home, rather than contributing to the household income.
Unfortunately, the tech sector will suffer the most from this, with men making up 84% of STEM graduates in Japan alone. Conversely, companies that invest in reskilling and upskilling women—while also providing flexible work arrangements—will reap the rewards when it comes to attracting and retaining female talent. Indeed, research from McKinsey shows that Asia Pacific could add $4.5 trillion to annual GDP in 2025 by closing the gender employment gap.
Key Takeaways for Employers
RPO in APAC
Despite the challenges of COVID-19 and changing demographics, corporations in the APAC region have showed resilient, expanding profits throughout the last decade. And, enticed by the large global hiring and labor market trends, leading organizations are investing in the talent pools of APAC as a means of future-proofing their workforce.
However, the complexity of the region also means that there’s no one-size-fits-all solution for recruitment in APAC. So, increasingly, global enterprises are turning to recruitment process outsourcing (RPO). According to Everest Group, Asia Pacific is the fastest growing region for RPO and is set to make a swift recovery; finding the right RPO partner in APAC can help you navigate the region’s unique talent market conditions—and capitalize on the growth it offers.
Learn more about how RPO can support your global talent acquisition strategy, download our free Buyer’s Guide to Global RPO.
I’ve tried to hide from the inevitable and deeply wanted to write about anything other than the ONS’s recent UK Labour Market overview for fear of adding to the pervading gloom of economic news. But as a recruitment professional, and as a worker, the findings are too stark and too significant to ignore.
The main impact is for employees, not employers, with a grim picture of pay in real terms falling at its fastest rate in over a decade as the cost-of-living crisis bites. This might lead to churn as those in work seek higher paying opportunities to maintain, not improve, their lifestyles. And they might well have choice—a record number of job vacancies have been recorded (again) in the UK. It is certainly a challenge to businesses that, while “pay is growing strongly as companies seek to attract people to work for them,” salaries are still falling well behind rates of inflation, putting ever more pressure on investment.
Higher Salaries Won’t Fix the UK’s Talent Shortages
It will be very difficult to use salaries alone to mitigate against the lack of supply the UK jobs market is seeing. The current position is indeed incredibly tight and exacerbated by ever increasing levels of economic inactivity: a “missing million” from the workforce. I’ve been guilty of viewing this as being driven by a positive choice to work less for lifestyle reasons (which does happen), so the view here of (rising, long term) ill-health keeping people from work was especially sobering.
What’s next? Follow the long-term graphs, and you’ll see repeatedly that economic slowdown = reduction in job vacancies.
It seems obvious that we can expect that again—an overall cooling of the job market as businesses reduce spend towards the end of the year. Does that mean recruitment will get easier? In some cases, yes: but the longer-term picture also shows critical talent shortages sticking around, driven by economic and demographic factors. Without an emphasis on connecting more people with work through education, training, and flexible support, recruitment efforts (and economic growth) will fall short.
This is what Peter Bendor-Samuel of Everest Group calls, “the cow behind the pig”: the bigger long-term challenge that can’t be ignored while digesting the smaller, short term one (for this analogy to work you have to imagine you are a python—or just read Peter’s blog it’s very good).
White knuckling the short-term in the hope that fewer people will be needed is a complacent talent strategy, where a winning one means a continued focus and investment in finding and keeping outstanding talent. Smart organisations must hold that course as much as possible in the face of slowdown, recession, stagflation and other economic headwinds.
U.S. employers added 390,000 jobs in May. This beat analyst expectations and shows continued strength despite the concerns of some economists. The unemployment remained at 3.6%. Year-over-year wage growth decreased slightly but remains high at 5.2%.
The Numbers
390,000: Employers added 390,000 jobs to the U.S. economy in May.
3.6%: The unemployment rate remained at 3.6%.
5.2%: Wages rose 5.2% over the past year.
The Good
After 12 straight months of greater than 400,000 monthly job growth, the 390,000 number is still good news. As CNBC reports, experts surveyed by Dow Jones had predicted just 328,000 new jobs. Despite concerns over an economic slowdown due to inflation, May’s numbers suggest that the job market continues to be strong. The labor force participation rate also increased to 62.3%, though it remains below pre-pandemic levels.
The Bad
While most sectors saw job growth in May, retail was the exception, shedding 61,000 jobs. The Washington Post reports that the shift comes as consumers have started spending less on goods and more on experiences like dining out and travel. (The leisure and hospitality sector again topped job growth with 84,000 new jobs.) The job market also remains tight, creating a tough market for employers. While wage growth has cooled slightly, it remains high.
The Unknown
As the Wall Street Journal reports, the Federal Reserve is now faced with the challenge of cooling inflation without tipping the economy into a recession. Federal Reserve Chair Jerome Powell told the publication last month, “There are pathways for us to be able to moderate demand, get demand and supply back in alignment, and get inflation back down while also having a strong labor market,” he said. “You’d still have quite a strong labor market if unemployment were to move up a few ticks.”
U.S. employers added 428,000 jobs in April, marking a full year with monthly job growth above 400,000. The unemployment remained at 3.6%. Year-over-year wage growth remained high at 5.5%.
The Numbers
428,000: U.S. Employers added 428,000 jobs in April.
3.6%: The unemployment rate remained at 3.6%.
5.5%: Wages grew 5.5% over the past year.
The Good
The New York Times reports that the U.S. economy has now regained 95% of the 22 million jobs lost at the start of the coronavirus pandemic. All major sectors saw growth, with the largest growth in trade, transportation and utilities, and leisure and hospitality. The unemployment rate remained near record low levels for the second straight month.
The Bad
Despite all of the good news in April’s report, the labor force contracted for the first time in seven months as the labor force participation rate fell from 62.4% to 62.2%. This accounts for an estimated 363,000 people.
However, as MarketWatch reports, it may be a fluke in the household survey, which can be volatile, and the results are often revised in later months. Before April’s report, the labor force has grown by an average of 315,000 people each month over the last year. Additionally, the decline in the labor force was most significant in workers under the age of 25.
However, the labor force participation rate is still below pre-pandemic levels, which creates an additional challenge for employers. There are currently more open jobs than there are unemployed people.
The Unknown
The jobs report is a bright spot for the economy as inflation continues to cause issues for American families. As the Washington Post reports, the Federal Reserve increased its benchmark rate by half a percentage point with the hope of curbing inflation. While wage growth remains high, workers are actually seeing decreasing purchasing power as the war in Ukraine and continued pandemic-related supply chain issues continue to drive prices higher. Experts will be watching closely to see how the economy responds.
U.S. employers added 431,000 jobs in March, which is slightly less than economists had predicted. It marks 11 straight months with job growth above 400,000. The unemployment fell to 3.6%. Year-over-year wage growth remained high at 5.6%.
The Numbers
431,000: U.S. employers added 431,000 jobs in March.
3.6%: The unemployment rate fell to 3.6%.
5.6%: Wages rose 5.6% over the past year.
The Good
March’s jobs numbers show that the economy remains strong despite challenges domestically and abroad. The unemployment fell to 3.6%, nearing the pre-pandemic low of 3.5%. And while the Wall Street Journal reports that economists had anticipated a gain of 490,000, the numbers for January and February were adjusted upward, accounting for the slight miss. Additionally, the labor force participation rate hit a new pandemic high of 62.4%, and 418,000 new workers joined the labor market, according to MarketWatch. The economy has now regained about 90% of the jobs lost at the height of the pandemic.
The Bad
Wage growth remained high in March, which can be seen as a positive by workers, but as the New York Times reports, it remains a worrying sign for inflation. The Federal Reserve raised interest rates in March, and officials have suggested rates may go up half a percentage point in May. The leisure and hospitality sector has seen the highest wage growth, with an 11.8% increase over the past year.
The Unknown
As CNBC reports, March’s jobs reports comes at a “critical juncture” in the pandemic recovery. There are currently five million more job openings than there are available workers. Inflation is at the highest rate since the mid-1980s. The war in Ukraine has created supply chain issues. Rising rates could dampen the housing market. Economists will continue to watch how all of these factors contribute to the country’s broader economic health in the coming months.
U.S. employers added an impressive 678,000 jobs in February, in the strongest jobs report since last summer. The unemployment rate fell to 3.8%. Year-over-year wage growth remained high at 5.1%.
The Numbers
678,000: Employers added 678,000 jobs to the U.S. economy in February.
3.8%: The unemployment rate fell to 3.8%.
5.1%: Wages rose 5.1% over the past year.
The Good
The headline number of 678,000 new jobs in February beat analyst expectations. Nearly a quarter of those jobs were in the leisure and hospitality sector, which includes the industries most impacted by coronavirus surges. Restaurants alone accounted for 124,000 new jobs, and no industries reported a decline in employment.
Additionally, labor force participation increased to 62.3%, though the number is still far below pre-pandemic numbers. However, the unemployment rate fell to 3.8%, only slightly higher than the 3.5% unemployment rate of February 2020. Though wage growth remains high, the Wall Street Journal reports that it has slowed enough to indicate that the nationwide labor shortage may be easing.
The Bad
There is very little bad news in February’s jobs report, though some challenges caused by the pandemic still remain. As the New York Times reports, the economy still has about 2 million fewer jobs it did before the pandemic, and the labor force is still about 3 million workers smaller.
The Unknown
February’s jobs numbers were collected before the Russian invasion of Ukraine, so they do not reflect any impact of the conflict. MarketWatch reports that the invasion is likely to worsen inflation. According to the New York Times, the U.S. will likely see less financial impact than Europe, but there will be repercussions that can be difficult to predict. Though experts do say that Americans are likely to see higher oil prices, which could curb household spending.
U.S. employers added 467,000 jobs in January, beating analyst expectations despite the surge in COVID-19 cases. The unemployment rate rose slightly to 4%. Year-over-year wage growth remained high at 5.7%.
The Numbers
467,000: Employers added 467,000 jobs in January.
4%: The unemployment rate rose slightly to 4%.
5.7%: Wages rose 5.7% over the past year.
The Good
Despite record numbers of COVID-19 cases across the country, employers beat analyst expectations to add 467,000 jobs to the U.S. economy in the first month of 2022. Additionally, the jobs numbers for November and December were revised up 700,000 over what was initially reported. According to MarketWatch, some experts had predicted an increase of only 150,000, while others had even expected a decrease in employment. Even the slight increase in the unemployment rate is good news, as it indicates more workers sidelined during the pandemic have reentered the labor market.
The Bad
There weren’t many downsides to January’s report. However, there may have been some impact due to the Omicron variant. The Wall Street Journal reports that nearly 2 million workers were prevented from looking for a job in January because of the pandemic. Additionally, 7.8 million said they missed some work because of Omicron.
The Unknown
Looking ahead to the rest of 2022, economists will be watching some factors still holding back the economy, according to the New York Times. Supply chain bottlenecks, labor shortages and high inflation have left Americans frustrated despite the fact that the unemployment rate has fallen faster than many experts predicted. Additionally, the strong recovery makes it likely that the Federal Reserve will raise interests rates in March, with traders predicting a half-point increase. Finally, employers and workers will be closely watching wages. Over the past year, wages have increased an average of 5.7%. While increasing wages are drawing more workers back into the labor market, they pose a challenge for employers.
