Developing workforce certainty in light of new BLS unemployment data
I try to reserve judgment over the monthly Bureau of Labor Statistics’ unemployment reports, rather than immediately jump to a conclusion and espouse a point of view. The extent of my economic education was Econ 101 and 102 in my undergrad days. In fact, this is likely the comprehension level of most Americans, and that is probably only if they went to school for a business degree.
I find it prudent to read the numbers, some opinions I trust, and the right and left columns of my TweetDeck-organized Twitter feed. The latter is probably the most interesting because, as I’ve stated before, both sides of the political spectrum do their best to spin the numbers in their favor.
This morning, after going through my BLS ritual, it became fairly clear that the monthly report is a whole lot of “meh.” It’s not really good and not really terrible. And unfortunately, “meh” doesn’t inject much confidence in the economic everyman like myself.
Two things jumped out at me from today’s news. First, economists that I trust, including Justin Wolfers and The Wall Street Journal’s David Wessel, do a good job of quickly dissecting the report. They explain that the results represent very slow growth. While the unemployment rate went down, the workforce has contracted due to workers giving up the hunt for a job.
Second, and perhaps most telling, is that even my “left” TweetDeck column (a list of politicos on the left side of American politics) is pointing out that growth is slow, and the unemployment number is deceptive due to decreased population of the workforce.
Were there any bright spots? Sure. Hourly wages have gone up slightly, confirming what we found in our Q3 technology wage index. Number of hours worked has also increased.
So what are we to do in the midst of the holiday season, with a new year of continued economic uncertainty ahead? (Collapse of the Euro, anyone?)
Stay the course.
We always recommend a dedicated effort to increasing the certainty of the workforce, especially in the face of political and economic uncertainty. This is accomplished by taking time each month to discretely evaluate your workforce plan and how your organization is performing against that plan.
Three key areas should be audited each month and adjusted as necessary:
- The talent deficit. Proper workforce plans project talent needs that come from executing the strategic objectives of the organization. Businesses routinely monitor performance against stated strategic objectives, but far too often, companies do not evaluate the workforce plan against that performance. This inherently leads to complications when the talent deficit rises, unknown to anyone but maybe the immediate hiring manager. The temptation is to not worry about the deficit in this sort of economic climate because skills can be found quickly on demand. Big mistake! Constantly pipelining candidates and sourcing ahead of demand is the only way to ensure that strategic execution is successful.
- Scenario alternatives. Increasing workforce certainty is a matter of being prepared for the multiple realistic scenarios that affect the business. On a monthly basis, evaluate how those possible scenarios are playing out. Most importantly, vet the actions that might or might not have been defined to respond to each scenario. This will ensure that they adequately help the organization sustain its growth operationally. As a staffing company, we’ll add here that your staffing partners absolutely should be willing to help you out with this. Engage them in the discussion and be as transparent as possible. They have the expertise to help map out proper expectations for what the timing of workforce ebb and flow will be, giving the newly evaluated workforce planning scenarios.
- Employee to non-employee ratio. Even in the most well-managed contingent staffing program, there is almost always a gap between what the company believes its volume of contracted labor is, and what it actually is. Why do you need to address this to establish a more credible understanding of the composition of the non-employee workforce? To address the first two items in this list. The contracted workforce is the most flexible. Therefore, it has the ability to be formed quickly to meet changing scenarios or mitigate certain areas of the talent deficit. A monthly audit of the who, what, and where of your contracted labor force might give you a skills inventory that can be quickly adjusted to meet the most pressing needs of the organization.
I wish the BLS report was filled with more than just “meh,” but hopefully the actions we have outlined here will help your organization translate that “meh” into a greater degree of workforce certainty.