Optimism is beginning to show amongst job seekers. U.S. companies reported unfilled job openings at a 14 year high in December 2014. During the same time period hiring of Americans was at a seven year high. Economists suggest that wage growth may be next.
Bloomberg Business reported job openings rose 181,000 in December to 5.03 million, the most since January of 2001.
Recent data comes via the Job Openings and Labor Turnover Survey, or JOLTS, which adds to monthly payroll figures by also measuring things like resignations, help wanted ads and the pace of hiring.
Bloomberg says Federal Reserve Chair Janet Yellen and the central bankers use the report to get a sense of how tight the labor market is and also measure worker confidence. The ratio of unemployed job seekers to openings fell to 1.7 with this last report. That is the lowest level since November of 2007, a month before the last recession began.
Bloomberg reports that not only are unfilled job openings up at recent-record levels, the number of people actually hired climbed to 5.15 million in December, the most in seven years.
Economists say that even with that gain though, the increase in the number of unfilled openings indicates companies are having trouble finding qualified help.
Some 2.72 million people quit their jobs at the end of 2014. That is the highest rate in four months.
Some Bad News
There is another figure that went up as well according to the Bloomberg Business report. About 1.73 million workers were fired from their jobs at the end of last year, up from 1.66 million the month before.
The unemployment rate also ticked up from 5.6% to 5.7% as more than a million Americans came into the labor force looking for work.
The Cost of Unfilled Job Openings
Fortune reports that D’Arcy, Vice President at Indeed.com, and researchers from the London-based Centre for Economic Research concluded in a study that the cost of unfilled jobs is more than $13 billion a month, or roughly $160 billion a year.
Last year CareerBuilder did a survey of 1,025 employers, 1,524 job seekers and 205 academics nationwide that looked at how the skills gap is affecting the U.S. labor market. Here are a few of the highlights:
- 60% of employers are concerned about the costs associated with delays in filling open positions.
- 1 in 4 employers have experienced losses in revenue as a result of not being able to fill open positions.
- Morale can go down due to employees shouldering heavier workloads,
- Unfinished work can cause delays in delivery times and declines in customer service.
- When asked what is driving the skills gap, employers identified gaps in education (the educated labor supply in the U.S. is not keeping up with demand); gaps in expectations around wages (employers can’t or aren’t willing to pay market value); job requirements that are above entry requirements (roles are more complex); and new or shifting technologies that make it difficult for educational institutions to keep up.
“There is a growing disconnect between the skills employers need and the skills that are being cultivated in the labor market today,” said Matt Ferguson, CEO of CareerBuilder. “This causes workers and companies to miss out on realizing their full potential and, in turn, causes the economy to fall short of its potential. The onus is on businesses and the public sector to work side by side to identify where there is a deficit of talent and reskill workers to close the gaps within their communities. This is not a problem that can be solved overnight, but it can be solved.”
What does all this mean? Companies need to focus efforts on selling their company brand when recruiting as well as employee retention. The tides are turning and the marketplace is favoring job seekers.
Sources: Fortune, Bloomberg Business, CareerBuilder, Staffing Talk